Contractor General Liability Insurance Risk

Contractors encounter many risks in their day to day business operations. Most of these risks arise from potential lawsuits filed by your customers. When your company is sued because a person is hurt near the area you’re working in, you have no choice but to spend time and money defending your company against the accusations that are made. If you’re found guilty, then you’ll have the added expense of paying for injuries or property damages or other court ordered awards against you. Unfortunately these types of risk only increase as your company grows, because when you are seen as successful then other people may try to take advantage of what they perceive to be a lucrative source of funds.

Contractor General Liability Insurance

contractor general liability insurance online policy

General liability insurance for contractors helps your company protect itself when legal accusations of fault are made against it. Whether the legal accusations arise because someone was physically hurt, or they’re blaming you for damages, this coverage protects you from having to handle all of the financial and legal fallout alone. General liability coverage protects your company from general, broad events. Events can include accidents, injuries, property damages and more. This baseline level of coverage is most important because it does not require you to specify individual events in your policy in order to be covered from them. That way, when the unexpected issues arise, you’re protected.

Contractor general liability insurance provides different levels of protection against accusations that come up even after your policy has been terminated. If the alleged incident happened while you carried the general liability policy on your contractor company, then it continues to provide the protective benefits outlined below.

  • Financial – General liability insurance for contractors pays for the normal costs associated with defending yourself against lawsuits in court.
  • Cost of Defense - When a lawsuit arises that accuses your company of being at fault for a physical injury or property damage, general liability pays for the associated costs. Expenses that normally arise include paying for legal counsel and representation, paying for documentation or research, paying for investigators and paying for witnesses.
  • Cost of Settlements - If your company loses the lawsuit, contractor general liability also pays out any award settlements up to the amount of your coverage.

Specific Liability Coverages Include

Bodily Injury: As a contractor, you may often find yourself and your employees working in temporary locations. This increases the likelihood that a customer, supplier, sub-contractor or third party gets physically hurt in or near your work area. When bodily injuries arise that are deemed to be due to some fault of yours, your general liability insurance pays for multiple types of related costs that arise. If a person trips on a power cord that you have running across a sidewalk for example, and they are injured badly enough to need to visit the hospital for treatment, then they may sue your company for the costs related to that hospital visit.

Property Damage: Contractors are often at risk of being accused of causing damage to someone else’s property. Simple, unexpected events can happen, such as a gust of wind blowing your ladder against a customer’s garage door and denting it. Even though it was a simple accident caused by the wind, that customer fully expects you to pay for his garage door to be replaced if the damage is severe, or repaired at the minimum. General liability insurance for contractors pays for these types of repairs and replacements, so that the costs do not have to come directly out of company funds.

Product-Completed Operations: When you provided general contracting services to your clients, there is always a risk that blame will arise against you in the future. If you sell products to the customer that prove to be faulty later, or if the customer associates work you performed with another damage problem on their property, they may file a lawsuit that claims you are responsible. Contractor general liability insurance mitigates the risks from these types of lawsuits, by ensuring that you are protected when they arise.

Personal and Advertising Injuries: Personal injuries or advertising injuries are terms used when legal action is filed against you for reputation related causes. A personal injury accusation often arises if one of your clients, competitors or other party feels that you said something which made them look bad. Sometimes they will accuse you of slandering their name for example, which they feel caused them to lose business. An advertising injury lawsuit is one in which the offended party believes you did something unlawful in your advertising and marketing messages, or that you did something with your advertising that harmed them. You may be sued for copyright infringement for example, for the use of a jingle in your TV commercial.

Damages to Facilities/Space Rented to You: Contractors often rent or lease the buildings that all or part of their business operates from. You may lease an equipment yard for instance, or a tool trailer that is used on remote work sites. When the leased or rented property gets damaged during the time it is in your company’s care, the owner of that property may sue you for the costs they will incur to fix the damages or replace the facility.

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