Contractors General Liability Policy

In general, contractors and contract business owners acquire a contractors general liability policy insurance to protect themselves from future lawsuits in cases of accidents. They are always aware of the fact that accidents can happen anytime even with the best planning and great situations. In their course of business, a variety of situations can always lead to on-the-job injuries and accidents. These possibilities make it important for them to have the general liability insurance in place.

Conditional Considerations for General Liability Insurance

In most states in the U.S., contractors are required to carry the contractors general liability policy insurance, whether they are sole proprietors or have employees. Contractors who have employees are also responsible to carry the worker’s compensation insurance.

In some cases, contractors who work for private companies can be required to obtain additional coverage even beyond state requirements. This is common to contractors who work with hazardous or flammable materials on job sites.

Based on individual risk management policies, companies employ the contractors who comply with their requirement with proof of coverage, that are, the insurance coverage certificates appropriate to company standards.

Identification of Coverage

The contractors general liability policy insurance offer surety and protection against claims made by third parties for bodily harm or injury, negligence or loss of limb or life, and property damage. This blanket coverage for both public and product liability also protects contractors from losses. The policy covers the indirect or direct actions of the insured contractor and his employees which could result in loss or damage due to product fault.

An individual risk assessment process is always done by insurers to determine which coverage level the contractor need considering the specific areas of his business deals.

Coverage Advantage and Benefits

Basically, the majority of contractors today are fully protected from lawsuits resulting from accidents while on the job, as assured by the general liability insurance policies.

The levels of coverage may actually vary and is usually dependent on identifying the sector and state of construction. But most states in the U.S. do require contractors carry the general liability insurance for protection.

Insurance coverage requirements for state and municipal contracts might be different from the private-party contracts. The state and municipal contacts recommend a minimum coverage for contractors at $2 million.

Contractors are allowed to participate in biddings without having to show the proof of insurance. But if that contractor is awarded the bid, a proof of an original insurance certificate will be required before the work begins. The contractor can avoid delays once they have complied with the standard $2 million policy.

A Chain of Significance

Since protection has become the name of the game, contractors also require their subcontractors and each of their employees to carry their own general-liability insurance policy. The standard $2 million policy is common. The employees and subcontractors can reduce the cost of the contractor’s general liability policy, by carrying their own policy. It also reduces the employer’s overall liability.

As separate entities, it is plainly important for employees and subcontractors to carry their own insurance policies.

The single-person policy insurance required here is sometimes also called the professional liability policy. This is actually similar to the medical professionals’ malpractice insurance policies. But we will not discuss the medical professionals’ policy.

Potential

For some contractors who own large contracting businesses, carrying more than the required minimum coverage is desirable and basic. These large contractors actually prefer to insure their businesses more than what the municipality or state requires of them.

Some of their policies have coverage of up to $5 million and sometimes even more. They use these policies as tools to streamline the bidding process. Contractors delayed in their start up operations due to insurance compliance will most likely be eliminated. Carrying the contractors general liability policy of this nature also add credibility besides its additional coverage.