Buying a California General Liability Insurance

How to Acquire CIGA General Liability Insurance

As we have discussed in some of the articles in this site, there are contractors who participate in biddings without the standing California general liability insurance. If the bid is awarded to them, they cannot begin work until they have secured the standard insurance coverage. Like a blanket, this insurance provides protection from all damages and injuries that may occur while the construction project is in progress. Nonetheless, it continues to cover the contractor’s legal fees in case wrongfully sued.

In general, the five major areas protected by this insurance policy includes; bodily injury to workers on the job, independent contractor liability, advertisement injury, product liability, and personal injury caused by wrongful eviction or privacy invasion.

Here are simple instructions on how to acquire this policy

1. First of all, prepare and gather your basic company information. Insurance companies generally would ask information about the following;

The amount of liability coverage you need which could be in millions of dollars
The county or city where your business is based
The type or classification of your contractor’s license
The gross income of the company, latest three years if you have them
The types of work the company specializes on
The size of the company’s annual payroll
And more information as the need may arise.

2. Do not stop at one insurance company. Browse and search for more online insurance companies that can provide competitive quotes in California. There will be a long list in the internet. Choose the top five.

3. Inquire about the insurance company’s ratings. Ratings can progress from B+, A-, A, A+ to A++, according to performance.

4. Inquire if the insurance company is admitted or non-admitted insurance company to CIGA. Mark their responses. In California, admitted insurance companies pay into the California Insurance Guaranty Association (CIGA). CIGA adds an additional layer of protection for the policyholder in case the insurance company defaults payment. CIGA assures the first $500,000 of claims on admitted companies in case of defaults.

5. For you to have the quotes you need, you have to provide the information the potential insurance companies need. Prepare a spreadsheet summarizing the insurers’ quotations, showing the insurance rating, the admittance to CIGA and its corresponding price quotation. You can compare them in a single sheet, perhaps in an apple to apple basis.

6. Inquire from other contractors and subcontractors, which insurance agents they are using and how well they perform.

7. Having collated several quotes, plus some recommendations by other contractors and subcontractors around you, you are now ready to make a decision which of these insurance companies can likely protect you well.

8. Having chosen the perfect insurance company for you, you can make a down payment for the liability insurance policy that you choose. According to the Contractors Group website, it is typical that insurance companies provide nine or 10 payments or premiums within a year.

9. Require your insurance agent to process and provide the customer certificate of insurance immediately. This will prove your insurance status. When in a contract, you cannot start construction until you provide the certificate of insurance to your client. Always request for a fax copy California general liability insurance certificate the moment it is mailed to your client.