by Allison Teetsel on Apr 14, 2013
Working as a contractor certainly has its perks: you set your own schedule, work according to your own terms, and you get to connect with other professionals whose skills supplement your own. You're in charge of your own destiny! Unfortunately, it isn't always easy when you're the one calling the shots. As a wise uncle once told his superhero nephew: with great power comes great responsibility. The very nature of contracting can make it a risky business, which is why it's important to protect yourself with an appropriate contractor's insurance policy. Read on to learn more.
Contractor's insurance is an umbrella term encompassing insurance policies designed to protect general contractors, contractors, and subcontractors on the job. Some of the many types of contractors include:
Heating & Air Conditioning firms
Janitorial Service providers
While the specifics may vary according to your industry and individual needs, almost all contractor's insurance policies include general liability coverage. General Liability Insurance may be bundled with other coverage in a Business Owner's Policy (BOP), and provides protection against lawsuits and other financial liabilities that result from accidents or other mishaps. Some of the scenarios covered by a general liability policy include:
Structural damage: Contractors routinely go into homes and businesses to work on projects, and the risks of inadvertently causing some type of damage are high. Whether it's a dropped hammer that shatters an heirloom vase, or a misplaced support that results in damaged sheet rock, contractor's insurance will help to cover the cost of repairing or replacing the damaged property.
Injury: As with any occupation, accidents sometimes happen. As a contractor, the physical and financial consequences of an accident that causes injury can be devastating. That's where contractor's insurance comes in. Your general liability insurance will help to cover the costs of any medical bills, and if the injured person files a lawsuit against you, the policy can help pay for legal costs and damages.
Other: Sometimes, the unexpected happens. Perhaps you’ve finished installing new kitchen cabinets. Two weeks later one of the cabinets falls from the wall damaging the new granite countertop. Although the policy does not insure your workmanship and the time and expense to repair and reinstall the cabinet, the resulting damage to the countertop is covered.
Contractor's insurance can be very complicated. Depending on how many general contractors and subcontractors you work with, you may hold several contractors for any given job. Contracts often include clauses such as “Broad Form Liability”, or require that you provide coverage for “all claims arising”. Many of these provisions can be modified or removed completely, but if they're not, they could render you solely responsible for anything that might happen on the job site. Without adequate protection, this type of liability could cost you your entire business! Fortunately, your local insurance representatives can help by making sure you've got the proper coverage for your business, and reviewing these legal agreements to ensure that you're not left holding a time bomb! To learn more about contractor's insurance and how it can benefit you, contact your trusted insurance experts toschedule a consultation.