Contractors require insurance to cushion their enterprises against risks such as property damage and bodily harm. The contractor's liability insurance protects contractors against lawsuit charges emanating from injuries incurred during construction works. A general understanding of contractor liability insurance is paramount in deciphering its role in the business realm.
Who Is Eligible For Contractor Liability Insurance?
Primarily, a general contractor should apply for contractor liability insurance coverage. However, a distinction exists between the general contractor, subcontractors, or individuals acting as contractors in their private projects. As a rule of thumb, if a subcontractor lacks liability insurance, the overall contractor is liable for their damages.
What Types of Businesses Are Covered by Contractor Liability Insurance?
The contractor liability insurance premiums differ depending on the type of work. Therefore, this insurance covers a myriad of businesses, including but not limited to:
- Roofing work
- All forms of repairs and renovations
- Installation works
- General aesthetics such as painting and landscaping
What Does Contractor Liability Insurance Cover?
Broadly, contractor liability insurance covers the following types of risks:
Contractor liability insurance coverage will cushion you against damages sustained to a third party's belongings should the equipment or products you offer malfunction. For example, suppose you are an electrician. In that case, your employees or subcontractors can fail to install the electric wires properly, causing damage to a client's items such as the refrigerators due to the installation fault. In such a situation, your contractor's liability insurance should help you cater to the damages or legal fees if a client presses charges against your company.
Your employees or subcontractors can cause damage to your customer's property. For instance, if your company offers services such as roofing, mishaps can happen, resulting in damage to the roofing materials leading to incidences such a leaking and eventual flooding of the client's house. Contractor liability insurance coverage will help you cater for this sort of damage.
A third party can sue your company for alleged body harm sustained during or after a job. For example, if your company oversees a contract to construct a road, an unmarked ditch or drainage furrow could be a potential hazard. If an individual falls into it and sustains body injuries, they could press charges against your firm. Contractor liability insurance should help you pay for their medical expenses or attorney fees to defend yourself against the allegation.
Contractor liability insurance coverage is a vital component of an insurance plan for businesses. Hopefully, the sentiments above shed light on your general understanding of this type of insurance. Contact a company that offers contractor liability insurance for more information.