Why a General Contractor Insurance Policy is not one size fits all
A General Contractor Insurance policy is an integral part of your business, particularly in a high-risk industry such as construction. It protects you and your business against unforeseen liability. But your business needs and the next person’s can be quite different, even though you work in the same industry. This means that insurance coverage shouldn’t be a one fits all solution. But more of that later.
What is a General Contractor Insurance policy?
General Contractor liability insurance provides protection against third-party damage or injury and property damage. It can be used in circumstances such as copyright claims, product claims, and damage claims.
As a general contractor, you are probably not working as an employee. As the owner of the business, you are liable for any misfortune that might happen at the workplace. This could potentially result in a heavy (and foreseen!) financial burden.
2 Reasons your General Contractor Policy is different than another’s
Fortunately, your General Contractor Insurance policy ensures you have peace of mind should the above happen, but this comes at a cost. The insurance cost will depend on a number of factors, including the risk of the type of work you are involved in.
The cost is not the same for every General Contractor Policy
Experts recommend that you have a general contractor policy that is at least three times your estimated budget, which varies from business to business.
Your coverage requirements may be different than another General Contractor’s
General liability insurance does not cover all the things a General Contractor may need protected. It is an essential policy in a construction company’s insurance program, but it does have limitations. If your insurance needs include any of the following, you will need to add additional policies to your program. (Tip: You can save costs by bundling your policies together.)
Extra coverage that you may need
Be aware that general liability insurance does not cover anything other than third party injuries and damages. If you do require any of the following, an insurance agency like Contractors Liability will advise you on your best options. We are here to help.
- Does not cover directors and officers
While it covers legal aspects, it does not protect the company’s officers or directors from getting sued. Should an officer or director get sued for unlawful acts, gross negligence, biased hiring, or incorrect investment decisions, liability insurance won’t cover these costs and damages. For this, you’ll require a Directors and Officers (D&O) insurance.
- Does not cover omissions and errors
Should your construction company get sued for offering unprofessional services, this insurance policy will not offer coverage for the lawsuits. You’ll need to purchase an errors and omissions insurance (E&O) policy.
- Does not cover intentional damage
This is where a worker intentionally causes partial or entire damage to a property under construction. You will have to cover such damages individually. This is why you need to conduct thorough recruitment practices in order to mitigate acts of recklessness.
- Does not cover criminal prosecution
Criminal prosecution arises when your construction company or a team member is found responsible for criminal acts such as theft. The general contractor policy will not offer coverage for subsequent costs.
Does your business have the right coverage?
Your General Contractor General Liability Insurance will provide your business with essential coverage. But is this all you need? We advise clients to regularly reassess their coverage to see whether it is adequate. Businesses grow and change, and your insurance should do the same. For free insurance advice call one of our agents from Contractors Liability on (866) 225-1950. We’re here to help and advise you with the right policies to protect you and your business.