Insurance for General Contractors

If you are a general contractor, then you know that your job comes with a certain amount of risk. There are many things that can go wrong on a job site, and accidents do happen. That is why it is so important for general contractors to have insurance. In this article, we will explore the different types of insurance that general contractors should consider, as well as answer some frequently asked questions about insurance.

Types of Insurance for General Contractors

General contractors should have several types of insurance to protect themselves and their business. These include:

Each of these types of insurance can provide important protections for general contractors. Now, let’s take a closer look at each one.

General Liability Insurance

General liability insurance is perhaps the most important type of insurance for general contractors. This type of insurance provides coverage for bodily injury, property damage, and personal injury that occur on the job site.

For example, if a worker accidentally drops a tool and it hits a passerby, general liability insurance would cover the resulting medical bills or legal fees. Likewise, if a worker accidentally damages property on the job site, general liability insurance would cover the cost of repairs or replacements.

It is important to note that general liability insurance does not cover everything. For example, it would not cover intentional acts of harm or damage. However, it is still an essential type of insurance for general contractors to have.

Workers’ Compensation Insurance

Workers’ compensation insurance is another important type of insurance for general contractors. This type of insurance provides benefits to employees who are injured on the job or who become ill due to their work.

For example, if a worker falls off a ladder and breaks their leg, workers’ compensation insurance would cover their medical bills and lost wages while they recover. Similarly, if a worker gets sick from exposure to hazardous materials on the job, workers’ compensation insurance would provide benefits.

It is important to note that workers’ compensation insurance is required by law in most states. Failure to have this insurance can result in fines or even criminal charges.

Builder’s Risk Insurance

Builder’s risk insurance is a type of insurance that protects against damage or loss to a building or structure while it is under construction. This can include damage caused by fire, theft, or natural disasters.

For example, if a fire breaks out on a construction site and damages the partially-built building, builder’s risk insurance would cover the cost of repairs or reconstruction.

It is important to note that builder’s risk insurance is generally only in effect during the construction phase and does not cover damage that occurs after the project is completed.

Professional Liability Insurance

Professional liability insurance, also known as errors and omissions insurance, provides coverage for claims of negligence or errors and omissions. This type of insurance can be particularly important for general contractors who provide design or consulting services.

For example, if a general contractor provides faulty design plans that result in a building collapse, professional liability insurance would cover the resulting damages or legal fees.

It is important to note that professional liability insurance is not the same as general liability insurance. General liability insurance provides coverage for bodily injury and property damage, while professional liability insurance covers claims of negligence or errors and omissions.

Frequently Asked Questions About Insurance for General Contractors

Do I Really Need Insurance If I Am Self-Employed?

Yes. Even if you are self-employed, it is important to have insurance. Accidents can happen regardless of whether you work for yourself or for a larger company. Without insurance, you could be held personally liable for damages or injuries that occur on the job site.

How Much Insurance Do I Need?

The amount of insurance you need depends on the size and scope of your projects. Generally speaking, you should have enough insurance to cover any damages or injuries that could reasonably occur on the job site. This may require working with an insurance agent to determine your specific needs.

How Much Does Insurance for General Contractors Cost?

The cost of insurance for general contractors varies depending on several factors, including the size of your business, the types of projects you work on, and your claims history. Working with an insurance agent can help you determine the costs associated with different types of insurance.

Can I Get Insurance If I Have a Poor Claims History?

It may be more difficult to obtain insurance if you have a poor claims history, but it is not impossible. Working with an experienced insurance agent can help you find a policy that meets your needs.

What Happens If I Don’t Have Insurance?

If you do not have insurance, you could be held personally liable for damages or injuries that occur on the job site. Depending on the severity of the damages or injuries, this could put your personal assets at risk.

Conclusion

Insurance is an important consideration for general contractors. With the right types and amounts of insurance, you can protect yourself and your business from the risks and uncertainties of the job site.

Remember to work with an experienced insurance agent to determine the types and amounts of insurance that are right for your business. By doing so, you can rest assured that you are protected against the unexpected.