Contractors are in one of the riskiest lines of work in the world. Every work site runs the risk of on-the-job injuries. Installing things in clients’ homes can cause property damage and bodily harm. Even having public storefront brings the risk of customers being injured.
Any business related to construction, especially contractors, will likely deal with damages or injuries at some point. The Occupational Safety and Health Administration (OSHA) places it in the highest risk category for workplace hazards.
How can your contracting business minimize the impact of these ever-present risks? You’ll need a good general liability insurance policy.
Coverage for Contractors
For a contracting business, general liability insurance brings several layers of protection.
- People: It can cover your employees and customers in the event that an accident causes them injury. With so much equipment, tools and raw materials involved in contracting, this is a significant concern. Medical bills, settlements, and judgments are usually covered.
- Assets: General liability insurance can help you deal with the fallout when your assets are at risk. In the event of property damage, your policy can prevent you from having to pay for repairs or replacement out-of-pocket.
- Reputation and stability: In the event of a lawsuit, your general liability policy can help you not only survive the financial hit, but also smooth things over with employees, clients, and the public. Being insured makes you seem reputable and trustworthy.
Common Claims Scenarios
Let’s look at a few everyday situations where general liability insurance comes in handy for contractors.
- Hazardous Objects: In contracting, hazards are a major factor in insurance claims. Collapses, falling objects, protrusions, moving materials, loose assemblies, and misplaced items cause a large proportion of claims. If you install a built-in bookcase in a customer’s home that later falls on the homeowner, you’ll likely be held responsible. You may also want to get additional errors and omissions coverage, in case you’re accused of faulty workmanship or failure to deliver services.
- Damage: Imagine that one of your employees drops a heavy tool on a marble floor at your client’s hotel. As a result, a large area of their expensive flooring is damaged. Wouldn’t you rather let insurance cover this cost than pay hundreds or thousands to repair it?
- Advertising: Let’s say you decide to run a few commercials on a local TV station, or run a special deal on social media. A competitor claims you stole their idea. Right or wrong, you have to fight it in court. A general liability policy can help with claims for infringement, libel, slander, brand damage, and other reputational harm.
- Slip-and-Fall: Wherever you interact with clients and the public, you’ll need to be insured in case an accident occurs. Let’s say a customer trips on a loose piece of flooring in your waiting area. Without insurance, you’ll need to pay for their hospital bills no matter how much it costs.
SEE ALSO: What is E&O Insurance?
Do We Have to Be Insured?
Contractors often ask insurance companies whether they have to buy insurance. Laws vary by state and local ordinance, but regardless, it’s hard to get hired when you’re uninsured.
Clients don’t like to work with contractors who don’t have insurance - in fact, it’s often one of the first questions they ask when drawing up a contract. General contractors usually require their subcontractors to be fully insured in case of property damage and bodily injury.
The real question to ask is: Can this company survive a disaster? If someone is severely injured, or major property damage occurs, or a competitor sues you for copyright infringement, can your company take the hit?
To be sure your contracting business is fully covered, contact us today. Get a free quote now from Links Insurance.