How General Contractor Insurance Can Help Your Firm?
Managing a construction site on any scale comes with considerable risks. As a general contractor, you oversee the entire operation, which comes with much responsibility. You must ensure that projects are completed according to the right specifications and on time. Even if you plan ahead in detail, there is potential for several things to go wrong.
For instance, workers or clients can get injured during construction. Your crew may also make mistakes, or damage the property of others. Sometimes, the results may not match the client's expectations despite your best efforts.
In these cases, having adequate general contractor insurance can come in handy. Read on to learn about the potential risks for a contracting business and how insurance can help cover specific risks.
Why You Need General Contractor Insurance?
Here are some problems that can come up for a general contracting firm:
- After completing a commercial building project, the roof leaks, and the client notices interior water damage. You submit a claim to your roofing contractor only to find the business has closed its doors, and there is no roofer's insurance to pay for repairs or a roofing company to correct the work.
- A worker slips off a ladder at a construction site and needs to be hospitalized. They cannot report to work for a couple of weeks until they recover. The injured worker is entitled to state benefits for medical care and lost wages.
- Not every risk is directly related to a construction project. A client or employee may slip and fall at your office. They may then expect compensation for medical expenses or sue over the damages.
- A windstorm breaks out, and your building and tools, heavy equipment, and other property stored inside your office are damaged. You will need to bear the costs of repairs and replacement.
- Suppose your firm uses various software and tools to store client data and improve online platforms. A hacker suddenly breaches your systems. Your company will have to bear the costs of data recovery, liability claims, or lawsuits, as well as repairing your company's reputation.
Investing in business insurance can help protect your company from third-party lawsuits, first-party property damage, and other scenarios. The key is to pick the right mix of coverage.
Types of General Contractor Insurance
Here are the top insurance coverages for general contracting companies:
General Contractor Liability Insurance
This is a necessary, basic type of insurance relevant to almost every company. It protects contracting businesses from third-party lawsuits that may arise due to bodily injuries sustained by a third party caused by your business or its employees.
It covers instances where a client's property suffers damage by your employees during a construction project. This type of insurance also covers advertising injuries, including lawsuits for libel and slander, by helping pay for legal defense and settlement for covered claims.
Commercial Property Insurance
This insurance helps cover damages related to commercial property. Some covered perils include windstorms, fires, theft, riots, and vandalism. The property covered can consist of buildings, furniture, inventory, tools, equipment, and appliances.
Replacing or repairing damaged property comes at a cost. If you can't pay these costs, it can lead to delays and even cause your firm to close its doors. Commercial property insurance helps pay for the replacement and repair of damaged property. Without it, you would need to pay out-of-pocket for such repairs and replacements.
Professional Liability Insurance
This type of insurance is especially relevant to general contractors and is also known as errors and omissions (E&O) insurance. Professional liability insurance helps protect companies against potential lawsuits related to errors, omissions, negligence, missed deadlines, and claims about unsatisfactory work.
Timely and adequate insurance can help safeguard your business and defend against such claims. It helps pay for costs such as legal fees, court fees, and related settlements for covered claims alleging your professional error or omission caused a financial loss to others.
Contractor's Tool and Equipment Insurance
General contractors often leave expensive tools and machinery at construction sites during projects, which could get vandalized or stolen when no one's around to keep an eye on them. This is where the contractor's tools and equipment insurance comes into the picture, helping you pay for the repair and replacement of the tools and equipment.
Workers' Compensation Insurance
In the construction industry, it is very common for workers to get injured on the job. Workers' compensation insurance covers the costs of state-mandated benefits such as medical care, lost wages, and death benefits in case of fatal accidents. This is mandatory insurance across all states, although the rules about requiring a work comp policy be purchased can vary.
Cyber Liability Insurance
Many contracting businesses use laptops, cloud computing services, and software to store, share, and process data. But technology comes with both benefits and risks. The levels of cybercrime are on the rise worldwide and could also affect your firm.
For instance, a data breach at your company could compromise sensitive client, project, and financial information. In such cases, cyber liability insurance helps cover expenses such as:
- Notifying your clients
- Recovering the stolen or compromised data
- Defending your company if clients sue for damages
- Repairing your company's brand image and reputation
- Paying ransom
- Loss of income
Insure Your Company Today
The costs your business will incur when not purchasing the proper insurance will be much greater than the cost of the insurance. Without insurance, the loss will take a toll on a contracting business's financials, perhaps even its survival.
But investment in the right mix of general contractor insurance coverages can help you build a sustainable contracting company. Partnering with a credible insurance advisor can help your business meet its needs. Take the next step and get your firm covered today with Insurance Advisor. Speak to our friendly, licensed agents at 855-600-2384 and identify the optimum insurance for your business needs.