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What Kind of Insurance Should a General Contractor Have?
Last Updated on: November 8th, 2024
Working as a contractor can be a lot of fun. For one, the money is good most of the time since profits from a project are all yours. Secondly, your working schedule is a lot more flexible as compared to if you were working as an employee. As rosy as it may seem, being a contractor also means you have your fair share of obligations.
For instance, as a contractor, you have to be accountable for everything that happens in your work area. Anything unfortunate that happens on a project site means you?re going to be held liable by the concerned parties. It could be an accident that leads to bodily injury to your team members or damage to client property.
Financial claims from clients and employees can impact a serious dent in a contractor?s finances. In fact, many contractors have had to close down their business after paying for such claims from their pocket.
To prevent such situations from occurring, smarter contractors will take the smarter path, and take out some form of general contractor?s insurance (more info here) to protect themselves and their business.
Read more below for our detailed list of various types of insurance suitable for general contractors.
1. General Liability Insurance
This insurance policy provides baseline coverage and protects your business from claims that arise from accidents that occur on the project site. If your client gets hurt or some property gets damaged, you as the contractor are going to be held liable.
If you are covered by a general liability insurance policy, any expenses incurred from the claims process, including legal, will be covered by your insurance provider.
2. Worker?s Compensation Insurance
Many types of contractor?s insurance usually center around the benefit of contractors and those who file claims. This policy, however, covers a contractor?s employees.
If you have employed workers to help actualize your project and an accident happens that renders them injured or worse, proves fatal, then the worker and their dependents will be fairly compensated.
3. Roofer?s Insurance
Roofing is regarded as one of the riskiest contracting projects. You can easily fall off or a tool can fall from the roof and cause severe damage or even injury. If your project involves roofing, paying for roofing insurance can take care of any property damage or bodily injury claims.
4. Automobile Liability Insurance
A construction project usually involves the use of vehicles in transporting equipment, material, and even workers to the site. By nature of the road, accidents can occur resulting in property damage, injuries, or death.
The contractor who owns those cars may find themselves at the harsh end of lawsuits and claims from the involved parties. But with automobile liability insurance, the contractor will be covered against such claims, including the legal fees that may arise.
Insurance Is Not an Expense but an Investment
While there?s a lot of truth in the old adage ?life is a gamble?, you should never put at risk what you can?t afford to lose. This phrase applies to many aspects of life, including business.
For you to run a smooth business as a contractor, you must be insured. An insured contractor is highly appealing to clients who can rest easy knowing any damages will be taken care of in the event of an accident.
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