What kind of insurance to general contractors need? 

General contractors need general liability insurance, which covers common risks like customer property damage, customer injury, and advertising injury. It will protect your small business from the potentially devastating costs of lawsuits and will help you qualify for contracts and leases. Independent contractors, as with any small business owner, can be held liable for damages and sued. General liability insurance, however, will protect you in the following ways: 

 

It protects both you and your business. General contractors have similar liability exposures and legal obligations as bigger firms, and can be sued for causing bodily harm, damaging a client’s property, or an advertising injury. General liability insurance will help protect you from damages and legal fees resulting from a lawsuit. 

 

Your clients want you to have it. Before signing a contract with you, your clients might required you to have general liability insurance. Otherwise, they can be held responsible for alleged accidents or wrongdoing caused by you or your work. 

 

It may be required by law. In the U.S., state regulations at times require contractors in industries like construction to have general liability insurance. More often than not, it’s better for you and your client to obtain separate general liability policies.  

 

What does general contractors insurance cover? 

Contractors and construction companies, from general contactors to carpenters, face high risks. General liability insurance policies help pay expenses relating to property damage and third-party injuries. If property damage happens during renovations or if a visitor is injured on your jobsite, to use a couple common examples, general liability insurance will cover the cost of repairs or medical bills. General liability provides coverage in the following areas: 

 

Customer injury. If a client trips over a ladder or a toolbox when you are doing carpentry or electrical work, you may take blame for the injury and end up – if the person sues you – paying for legal and medical bills. General liability insurance would cover settlements, funeral expenses in fatal incidents, medical bills, attorney fees, and court-ordered judgements. For a policy that covers employee injuries, you will need to buy separate workers’ compensation insurance. 

 

Customer property damage. For contractors and builders, accidents can be costly. General liability insurance will protect your small business in the even that a client’s property is damaged. If a customer’s furniture is damaged while remodeling, for instance, your general liability insurance may help pay for the cost of replacement or repair. If a customer choses to take you to court of damaged property, this policy will also cover the cost of a lawsuit.  

 

Libel and slander. When advertising your construction business and its services, you may inadvertently mimic another ad campaign or copy a competitor’s slogan. General liability insurance covers accidental advertising injuries such as copyright infringement and defamation, both slander and libel.  

 

Products-completed operations. This coverage will protect your company when your completed work caused property damage or bodily injury due to faulty workmanship. Take, for instance, if a plumber installs a kitchen sink. If after two weeks the homeowner finds the sink leaked and damaged the kitchen flooring, this coverage would protect the plumber in a potential lawsuit.  

 

How do contractors get insurance work? 

There are two ways that you as a contractor can start working for an insurance company: you can go through the homeowners or you can go through the insurance company. To go through the insurance company directly, you will need to have some experience in disaster mitigation work, since an insurer will want to feel confident that you have the experience and knowledge to handle a claim. Usually, it makes more sense to start working with homeowners to build your portfolio. 

 

To land work with homeowners during what can be the most stressful moments of their lives, contractors who get the jobs are going to be contractors who relieve stress. A large part of the stress of rebuilding after your home is damaged in a disaster is working with an insurer. Contractors who can take care of that will be much more attractive to homeowners. The next steps that fall under the contractor’s purview is then negotiating with the adjuster, courting the insurance agent, and keeping the insurance agent happy. Another thing to note is that construction management software will make you more trustworthy, i.e., appear more professional.  

 

Does general liability insurance cover independent contractors? 

Typically, general liability insurance doesn’t protect subcontractors or independent contractors, meaning your insurance probably doesn’t protect your customers from independent contractors or their mistakes. In all likelihood, it doesn’t cover damage caused by accidents either. Having said that, there are policies that do provide some extent of coverage, which means you will have to read and understand your policy to determine what is actually covered.  

 

Who has the cheapest business insurance?  

According to a September 2020 report by Fit Small Business, the 6 cheapest general liability insurance companies for small business in the U.S. are: CyberPolicy, Hiscox, State Farm, Chubb, The Hartford, and Travelers.