Types of Liability Insurance for Contractors
For a contractor, the threat of litigation is a real possibility. One of his employees could unintentionally cause injury or damage to another person or property at any time. Since a lawsuit could potentially wipe out the business, the contractor needs to be prepared for the worst-case scenario by having adequate liability insurance.
Other People Are Reading
-
General Liability Insurance
-
As the name implies, General Liability Insurance protects a contractor by providing a wide range of liability issues that could occur during a project. Examples include property damage coverage, which pays out in the event of damages caused to another party's property; personal injury insurance, which provides coverage for injuries sustained by a third party; and product liability, which covers you in the event that a product you manufacture causes damage to another person or property.
Commercial Auto Liability
-
If your business owns a vehicle or a fleet of vehicles, take out a business auto policy. This protects your business in the event that you or an employee driving a company vehicle causes injury or property damage as the result of a covered accident. Depending on the state, this can even apply to workers such as newspaper or rural mail delivery contractors who use their personal vehicle on the job.
-
Surety Bonds
-
Surety bonds protect you in the event that you fail to perform a job as specified by the contract you entered into with your client. The bond compensates the client for any damages or financial loss that results from your failure to fulfill your obligations.
Workers Compensation
-
Workers Compensation Insurance protects you from potential lawsuits in the event that one of your workers is injured or becomes ill due to a work-related incident. In addition to paying any applicable medical expenses, workers comp also compensates the employee for work time lost due to the injury or illness. This coverage is mandatory in all states.
Umbrella Coverage
-
Umbrella coverage, also know as excess coverage, provides protection over and above what a general liability policy provides. Coverage may be available on a blanket or per-project basis. Additional amounts can also be purchased to provide coverage for specific events that may occur.
-
