General Liability Insurance: Important Things You Need to Know
[This article was written by Rachel Porter.]
Many perks and privileges come with having your own construction business, but this also means carrying a ton of responsibilities on your shoulders. Your employees, your clients, and the future of your business are all counting you. Thus, it is wise and in your best interest to plan ahead and prepare for unexpected situations that can put your business at risk by purchasing general liability insurance.
General Liability Insurance, Defined
General liability insurance is known by other names, such as business liability insurance and comprehensive commercial insurance. Whatever it’s called, though, it has the same purpose.
In a nutshell, general liability insurance will save your business from paying out-of-pocket in case of injuries, damages, or lawsuits. The policy offers coverage for liability claims in case of on-site accidents and injuries or damages caused to other people or their property.
Your general liability insurance protects you from many of the common issues that confront contractors in the construction industry. The insurance policy takes effect and provides coverage for:
- Third party accidents or injuries on-site involving non-employees.
- Damages on someone else’s property
- Legal expenses for lawsuits resulting from third-party accidents, property damage, or reputation damage
- Advertising mistakes/issues or copyright infringement
What’s Not Covered
As the name implies, general liability insurance covers general threats to the financial stability of businesses but often don’t include the more specific types of risks that contractors face. The policy is designed to protect companies against third party liabilities; it does not cover claims and expenses involving employees or damages caused/sustained by intentional acts.
Incidents and situations typically NOT covered by general liability insurance include:
- Employee injuries (you’ll need worker’s compensation insurance for this one)
- Professional mistakes; although professional liabilities are covered
- Auto-related accidents and coverages (this requires an auto insurance policy)
- Punitive damages that result from lawsuits.
- Damages and or injuries resulting from intentional acts
Contractors NEED Insurance
As a contractor, you and your crew are exposed to plenty of risks during your day-to-day operations. Slips and falls are common, and there’s always the danger of workplace accidents – on yourselves and other people. Without proper insurance coverages, you – as the business owner – may be held liable for any expenses associated with workplace injuries and property damage, among others. This could include lawsuits, property damage claims, and medical bills.
For contractors, not having appropriate insurance coverages – especially if you’re operating without general liability insurance – exposes the business to potentially catastrophic losses that may end up driving the company to the ground. There is so much to lose and so much at stake when you’re the contractor. Having all the right insurance policies for your business limits your liability and keeps financial troubles at bay.
By partnering with a trusted contractor’s insurance provider, you’ll have peace of mind from knowing that you won’t have to bear the brunt of expenses should an injury or workplace accident happen. Also, having necessary insurance policies sends a positive message to your clients and lets them know of your commitment to providing quality services.
Rachel Porter is the content specialist for Custom Contractors Insurance, LLC, an Arizona roofing and contractors insurance company. When not writing, she enjoys reading and mountain biking with her friends.