The foundation of any contractor’s risk management plan. Protects you from property damage & injury claims made by others.
Liability insurance is a type of contractors insurance that protects the policy holder from a wide variety of third-party claims – the kinds of claims that are hard to prevent and expensive to face.
A “third-party” claim is a lawsuit that is brought against you by someone who doesn’t work for you. A homeowner says your company didn’t install the flashing correctly on their new roof and now there is significant water damage in their attic. The developer who claims you didn’t install the drains at the correct slope and now their new hotel’s plumbing has serious clogging issues. The drywall subcontractor who tripped on some discarded material and broke their leg then sues you because you’re the GC and you’re in charge of keeping a tidy job site. These are examples of third-party claims and whether it is the contractor’s fault or not, the costs to defend oneself against any claim, frivolous or not, can be staggering.
General Liability insurance primarily covers bodily injury and property damage claims arising from your work as a contractor. While there is some additional coverage for personal/advertising injury such as copyright infringement or libel and coverage for premises you rent, most construction companies rarely have need for these.
Chances are if you’ve been in the construction business for any length of time, you’ve been asked by a General Contractor, Homeowner, or Property Management company to supply a Certificate of Insurance showing General Liability insurance. Some states will even require a liability insurance policy to be in place before they issue a contractor’s license number. General Liability insurance is an essential part of your business. Builder’s Shield Insurance Services has the expertise and relationships to ensure you’re getting the best coverage for the best price.
How Much Does It Cost?
Contractors Liability insurance policy pricing is determined by a few different factors. The importance of working with an insurance agency that specializes in construction cannot be understated. If you’re not, then you’re probably paying too much.
- Trade & Operations
- Annual Revenues
- Employee Payroll
- Subcontractor Costs
- Loss History
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What is Contractor's Liability Insurance?
Simply put, Contractor’s Liability insurance protects the policy holder if someone sues them because their work injured them or damaged their property. General Liability insurance is the most common but there are other types of liability insurance policies in the construction industry as well. Professional Liability insurance is typically geared towards architects, engineers, and design/build contractors. WRAP/OCIP Liability policies are designed for condo/townhome and large tract home projects. And Pollution Liability insurance is designed for plumbers, remediation contractors, and other trades that have significant pollution risk exposure.
Why do I need it?
The costs of defending yourself and your work in court can be staggering, and an accident on a job can mean disaster to your business. Most companies do not have the financial resources to recover from a lawsuit or costly accident. Liability insurance gives safety and peace of mind to contractors because they know they’re covered if something goes wrong. Furthermore, more and more states are requiring a liability insurance policy to obtain a contractor’s license and increasing numbers of homeowners, property management companies, and GC’s are requiring a certificate of insurance to win the job.
What does it cover?
Liability insurance covers bodily injury and property damage claims resulting from your work. You paint the exterior of a building and accidentally overspray onto 3 cars in the parking lot. You’re installing granite countertops and accidentally damage the customer’s new wood floor. Some material or debris falls and hits a pedestrian walking by. Contractor’s Liability insurance will cover these damages as well as the cost to defend the policy holder in court.
What is NOT covered?
Here are some of the most common items typically not covered by Liability insurance:
- Tools, equipment, material.
- Damage to your property or injury to your employees.
- Damage to the material you’re installing
Check your current policy to see the specific exclusions or give us a call and we can go over it with you.
How fast can I get it and what do you need from me?
For a standard General Liability policy, we can get you up and running within a few hours. For more complex policies like WRAP or Pollution policies, the turnaround time can be a day or two to a few weeks. Necessary information required to provide a quote is:
- Company Info (name, address, phone #, email)
- What type of work are you doing?
- Estimated annual projections (gross sales, field payroll, subcontractor costs)
Why You're Paying Too Much For Insurance
Sure, factors like trade, experience, revenue, and payroll affect how much you pay for insurance. But there is another factor that contributes to why Builder’s Shield is able to save their contractors an average of 18% on their policies.
Insurance or Bond? What's The Difference?
It is one of the most common questions we get asked and the answer could save you a lot of money and trouble. Learn the difference between two critical elements of a contractor’s risk management plan.