Contractor General Liability Insurance. Construction businesses frequently perform work that is complex, difficult, and potentially risky, with a high potential for causing injury or property damage to third parties.
Contractor General Liability Insurance
A contractor’s general liability insurance can protect contractors in these situations by providing support for legal fees and paying settlements that would otherwise be the contractor’s responsibility.
What is General Liability Insurance?
General liability insurance helps protect against general claims by third parties. These claims typically involve bodily injuries and property damage that result from a contractor’s products, services, or operations. They can include advertising claims involving defamation.
This is to ensure businesses operate safely, so some claims arise out of negligence, careless business practices, or unavoidable accidents. They protect contractors by preserving business assets and covering damages up to the policy limits for covered claims.
What Does General Liability Insurance Cover?
General liability insurance covers most claims made against contractors in the following situations:
- Bodily Injury
When a customer or third party experiences an injury related to your work (like tripping over some wiring), they could sue you. General liability insurance would cover court fees and potential settlements up to your coverage limits.
- Personal and Advertising Injuries
You may unintentionally harm another business through advertising, libel, or slander, and a general liability policy can help pay for damages to the other business.
- Property Damage
While performing work, you may cause unintentional damage to the customer`s property. For example, furniture, drywall, flooring, and general liability insurance would help pay for the cost of damages.
What’s Excluded from General Liability Insurance?
When you are aware of the gaps in your policy, you can take action to be sure you are not leaving yourself exposed to unnecessary risks that could cost you money in the long run. These are some of the aspects that your general liability policy does not cover.
- Professional Errors
It is important to remember that general liability insurance does not cover professional errors made by you or your employees. This means that general liability typically won’t cover faulty workmanship or lawsuits over poor advice given to a customer.
- Employee Injuries
General liability insurance may not cover accidents resulting in injuries to your employees, only accidental third-party injuries. For example, if one of your employees slips and sustains an injury as a result, your policy may not be able to cover their medical expenses or potential lawsuits.
Your general liability insurance policy will typically exclude any vehicle used for your business. Furthermore, if you use your vehicle for work purposes, your general liability insurance may not cover damages that occur while the vehicle is being used for work purposes.
- Intended Damage
General liability insurance does not cover intentional damage done to your product or property by you or one of the insured parties on your policy. For example, your best employee is having the worst day ever. In a moment of uncharacteristic anger, he takes his frustrations out in the worst way possible by hugging a wrench through someone’s window.
Normally, damage to someone else’s property that is your fault or your employee’s fault would be covered under your general liability policy. but not in this case because intentional damage is never going to be covered by any insurance policy.
- Damages to Your Property
General liability insurance does cover property damages, but only under specific circumstances. General liability insurance is designed to protect you from third-party lawsuits, which means it only covers damages to your property by an outside party, like a customer.
If you or one of your employees drives a tractor through your window, your general liability policy typically will not cover it.
The Best General Liability Insurance for Contractors
Here are some of the best insurance companies that offer general liability coverage for contractors:
The Hartford (Best Overall General Liability for Contractors)
Hartford has the lowest general liability insurance costs for contractors. This company has strong customer satisfaction and financial strength scores. However, compared to other companies, Hartford has a slow online quote process. Online quotes may not be available nationwide.
Nationwide is another affordable option for sole proprietors and LLC-structured general contractors. It has few customer complaints and superior financial strength to pay claims. But Nationwide has the slowest quote time of all company picks, so it may not be the best choice if you need a fast quote.
Besides general liability insurance coverage for contractors, nationwide companies offer surety bonds, inland marine for tools and equipment, commercial property and auto, workers’ compensation, and commercial umbrella coverage.
They are part of the Berkshire Hathaway insurance group. They offer affordable rates for sole proprietors, though they lack quotes for general contractors LLCs. It has strong financial stability to pay its obligations, including claim payouts. They only offer general liability coverage in 27 states. It also has a long online quote process.
Hiscox has strong financial stability and customer satisfaction scores, making it a good contender for general liability insurance coverage for contractors. It offers fast online quotes with affordable rates for sole proprietor general contractors, but no online option for LLCs. Hiscox only offers online quotes to contractors depending on employee count and business structure.
Thimble offers the fastest online quote time of all companies and is widely available nationwide. It offers online quotes in every state plus the District of Columbia. General contractors can also get commercial auto and property insurance, workers’ compensation, and business equipment protection policies through Thimble. It also has a strong financial stability rating, but low customer satisfaction.
Next offers another option for general contractors with a fast online quote process that is available in almost all states. It offers several policy options for general contractors, including workers’ compensation, BOP, and commercial auto insurance. However, its general liability for contractors policy comes at a high cost for both LLCs and sole proprietors.
Frequently Asked Questions
How much does General Liability Insurance Cost?
There is no standard cost for general liability insurance, but there are several factors that may influence the actual cost.
. Geographic region
. Contractor specialty
. Annual revenue
. Claim history
. Desired coverage limits
. Employee headcount.
What other Insurance Policies do Contractors need?
Other forms of insurance that are common for construction companies include
. Workers Compensation
. Builders risk
. Subcontractor default insurance
General liability insurance is one of the most important insurance policies you can invest in. It is considered the foundation policy for every business’s insurance coverage. It protects you from lawsuits resulting from a wide range of incidents.