As a contractor, your work comes with a lot of risks. No matter how experienced or skilled you are, accidents and mistakes can happen. That’s why it’s important to have general liability insurance as part of your business protection plan. In this article, we’ll discuss what general liability contractors insurance is, what it covers, and why it’s essential for every contractor.
What is General Liability Contractors Insurance?
General liability insurance for contractors, also known as commercial general liability (CGL) insurance, is a type of insurance policy that protects your business from third-party claims for property damage, bodily injury, and other types of losses. This type of insurance covers legal costs, settlements, and judgments if your business is found liable for these types of claims.
For example, if you accidentally damage a customer’s property while working on a project, or if a customer gets injured on your jobsite, general liability insurance could help cover the costs of any resulting legal claims or settlements.
What Does General Liability Contractors Insurance Cover?
General liability insurance for contractors typically covers a variety of risks, including:
What’s Covered |
What’s Not Covered |
Property damage to third-party property |
Damage to your own property |
Bodily injury to third parties |
Bodily injury to your employees |
Advertising injury (e.g., libel, slander) |
Intentional acts |
Products and completed operations |
Professional negligence |
Medical payments to third parties |
Damage to your reputation |
It’s important to note that general liability insurance typically does not cover professional liability claims, such as errors and omissions or professional negligence.
Why is General Liability Contractors Insurance Essential?
General liability insurance is essential for contractors for several key reasons:
Protecting Your Assets
Without insurance, a single lawsuit or claim can wipe out your business assets, leaving you financially devastated. General liability insurance helps protect your business by providing coverage for legal fees, settlements, and judgments.
Meeting Contract Requirements
Many clients and contractors require proof of general liability insurance before they will work with you. Having this type of coverage can help you win new business and protect your reputation.
Peace of Mind
Knowing that you have insurance coverage in place can give you peace of mind when you’re on the job. You can focus on your work, rather than worrying about potential accidents, claims, or lawsuits.
FAQ
Do I Need General Liability Insurance if I’m a Sole Proprietor?
Yes, even if you’re a sole proprietor, it’s important to have general liability insurance. Accidents and mistakes can happen to anyone, and without insurance, you could be personally liable for any resulting damages or legal fees.
What Happens if I Don’t Have General Liability Insurance?
If you don’t have general liability insurance and someone files a claim against your business, you could be personally liable for any resulting damages or legal fees. This could lead to costly lawsuits, bankruptcy, and even the loss of personal assets.
How Much Does General Liability Insurance Cost?
The cost of general liability insurance varies depending on several factors, including your location, the size of your business, and the type of projects you work on. On average, contractors can expect to pay between $400 and $1,200 per year for general liability insurance.
How Much Coverage Do I Need?
The amount of coverage you need depends on several factors, including the size of your business, the type of projects you work on, and your level of risk. In general, it’s a good idea to have at least $1 million in coverage, although some contractors may need additional coverage depending on their specific circumstances.
Can I Add Additional Coverage to My General Liability Policy?
Yes, many insurance companies offer add-on coverage options for contractors, such as professional liability, cyber liability, and workers’ compensation insurance. Talk to your insurance provider to learn more about your options and to determine which types of coverage are right for you.
Conclusion
As a contractor, general liability insurance is an essential part of your business protection plan. It can help protect your assets, meet contract requirements, and give you peace of mind when you’re on the job. Take the time to explore your options and find the right coverage for your business.
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