Contractor Liability Insurance: Guide to Small Business Insurance

Contractor liability insurance is often a necessity for a small business. Building contractors need insurance to cover any damages that may arise from accidents and mistakes on the job site. If anything goes wrong on the building site, it will be considered the contractor’s fault, whether it is really his fault or not. This also includes HVAC contractors, restoration and residential home builders, highway and road construction, as well as, masonry work for tile, marble, and mosaic, plumbing, electricity, carpenters, and painters. In the case of on-the-job injuries or death of employees, bystanders and owners, there can be huge medical and property damage costs which can mostly be covered by contractor liability insurance.

General contractor liability insurance: When is it required?

Like other types of contractor insurance, general contractor liability insurance is required for contractors in most states even if they have no employees and are sole proprietors. If there are employees, worker’s compensation may also be necessary. A building company or municipality that employs contractors will require that the contractor have insurance that is suitable for the type of business he conducts. For example, if there is any flammable material or hazardous chemicals used in the work, the insurance policy will need to cover this. These companies have policies on risk management and often require that the contractor have more than one policy of contractor insurance.

Employer liability insurance: Protection against lawsuits

Protection against accidents and mistakes is not the only consideration. Blanket coverage is required to cover any fault in the product as well. This can be ascertained by a risk assessment of the contractor’s particular business to see what kind of coverage he needs. If there are employees involved with the contractor, they will need employer liability insurance or workers compensation. This is protection for the employer if there is any job related injury, illness or damages that would cause the employee to sue the company.

Small business insurance: Why it is important

In some states, minimum protection from small business insurance is required to get a license to operate. Even if it is not a requirement in some areas, it is a good idea to have our business protected by policies covering business contents insurance or buildings and contents insurance. By definition, the small business will probably not have an unlimited cash flow and may not survive a lawsuit from an employee or customer in case of injury on their premises. Having this and other kinds of liability covered by insurance will give peace of mind to the owner of the business.

Liability insurance quotes: What factors to consider?

To get good liability insurance quotes, the contractor needs to know exactly what kind of insurance is needed. General liability is necessary, but there is other coverage that may be necessary depending on the type of work. For example, a contractor may need business auto insurance, workers compensation, special coverage for hazardous materials, employee practices liability, and property coverage to name a few. There is also builder’s risk coverage for any theft or vandalism done on a building or work site while the contractor is working there. The cheapest insurance quote available is often not the best. An insurance carrier who will research a business thoroughly and give a fair customized quote is the safest. For any type of working professional, from road graders to swimming pool contractors, liability insurance for a stress-free working environment is essential.