What Does General Liability Insurance Cover For Contractors – An Ultimate Guide

As a contractor, you may be wondering if general liability insurance is really worth the money. After all, it can feel like an extra expense that cuts into your profits. However, this insurance is actually essential for protecting yourself financially if something goes wrong. 

Let’s dive into the details:

What Does General Liability Insurance For Contractors Protect You From?

General liability insurance (GLI) can protect you from financial losses, such as bodily injury or property damage while working on an on-site project. Moreover, it will also help you if your business is under some sort of threat. 

Keep in mind that general liability insurance doesn’t cover human errors or accidents caused by them. 

Having a general liability insurance plan can offer you monetary help with each entity in more detail. This can be helpful if you have unexpected expenses or damages that occur.

Here’s what GLI covers:

Property Damage

If you or one of the workers accidentally damages someone’s property while working on-site, general liability insurance will cover the repair or replacement costs.

Bodily Injury

This is perhaps the most critical aspect of general liability insurance for contractors. If you or your employees end up injuring someone while working, this insurance will cover the associated medical costs. 

Completed operation liability

Completed operations liability is coverage for a business’s legal responsibility for injuries or damages that occur after completing a project. This type of liability coverage is vital for businesses that provide services since they can be held liable for any accidents or injuries that occur after the job is done. 

Without this coverage, a business could be forced to pay out of pocket for any damages that occur, which could quickly bankrupt the company. Therefore, a business’s general liability insurance policy typically includes completed operations liability coverage.

Medical Payments

General liability insurance can help cover the costs of medical care for anyone who is injured on your construction site.

Personal and advertising injury

You will be protected if a competitor sues you for copyright infringement when you have a general liability insurance policy. This type of policy covers a wide range of potential issues, from allegations of similarity in advertising to claims of defamation or slander.

What Are Add-Ons For General Liability Insurance For Contractors?

There are many different types of add-ons that can be added to a general liability insurance policy for contractors. Some common add-ons include equipment coverage, data breach protection, and environmental liability coverage. Each type of coverage has its own set of benefits and protections, so it’s essential to choose the right mix of add-ons to ensure that your business is properly protected.

Equipment Coverage: Equipment coverage is important for any contractor who uses expensive or delicate equipment in their work. If this equipment is damaged or destroyed, it can be very costly to replace. 

Data Breach: Data breach protection is critical for any business that handles sensitive customer information. If this data is leaked or stolen, it can cause serious damage to your reputation and bottom line. 

Environmental Liability Coverage: Environmental liability coverage is important for contractors who work in or around hazardous materials. If these materials are released into the environment, they can cause serious damage to both people and property.

Things Not Covered in General Liability Insurance For Contractors

A few things are not covered in general liability insurance for contractors. These include:

  • Bodily injury or property damage that the contractor intentionally causes
  • Professional services that the contractor agreed to provide, such as architectural or engineering advice
  • Work that is performed on a premises that is known to be unsafe
  • Any damage that is caused by the use of faulty materials or products that the contractor supplied
  • Liability for injuries or damages that occur due to the negligence of any subcontractors or employees working for the contractor.

Yearly Cost Of General Liability Insurance For Contractors

The cost varies depending on the size of your business, the type of work you do, your claims history, and other factors. On average, expect to pay $70/month and $825/year

How To Get General Liability Insurance For Contractors?

You can get it from most business insurance carriers. However, be sure to compare policies and quotes from several insurers to find the best coverage and price for your business. 

However, general liability insurance for contractors is available through state-sponsored workers’ compensation funds in some states.

Premium Audit And Its Purpose

A premium audit examines a company’s insurance policies and records to ensure that the premiums charged are accurate. The audit is usually conducted by an insurance company or an independent auditor.

The purpose of the audit is to verify that the company has been accurately billed for the policies and that the policies are in effect. The auditor will also review the company’s records to ensure that all claims have been properly documented and paid.

During the audit, the auditor will review the following:

  1. The insurance policies themselves
  2. The company’s books and records
  3. Any correspondence between the company and the insurance carrier
  4. Any other relevant documentation

After the audit is complete, the auditor will provide the company with a report detailing its findings. If the auditor finds that the company has been overcharged, the insurance carrier will issue a refund. On the other hand, if the audit finds that the company has underpaid, the company will be required to pay the outstanding premium.

The Final Word

General liability insurance is an essential policy for any contractor to have. It can protect you from several risks and cover costs in the event of a claim. First, however, it’s important to know what general liability insurance does and doesn’t cover to ensure your business is fully protected. 

We hope this article has helped explain contractor general liability insurance basics. If you have any questions or want more information, please don’t hesitate to contact us. We are happy to help!