Contractors face unique risks that are not as common in other industries. To protect against risks like bodily injury and property damage, many contractors rely on general liability insurance.
General liability insurance is a type of business coverage that protects companies from claims of bodily injury, property damage, reputational harm, copyright infringement and advertising injury. With general liability insurance, contractors can receive peace of mind that they will not be held financially responsible.
What General Liability Insurance Covers
General liability insurance helps protect businesses from claims that come from normal business operations, such as:
Physical Injury
Construction sites can be a dangerous place. Construction workers are often required to operate powerful machinery, use complex tools and come into contact with hazardous materials. When someone is injured on the job site, it can lead to serious injuries or illnesses. General liability insurance helps cover medical payments that occur as a result of an accident on the business’s premises or work site.
Property Damage
Property damage claims are also common in the construction industry. A contractor could damage the home of a customer while performing repairs or may be sued for poor workmanship that resulted in damages. General liability insurance can help cover claims costs if a general contractor damages someone else’s property while performing their job duties.
Advertising Injury
Advertising injury coverage is an essential component of any general liability insurance policy. This type of coverage helps protect policyholders against claims of stolen ideas, libel, slander, invasion of privacy and copyright infringement in relation to advertising the business. General liability insurance may also cover personal injury claims.
Defense Costs
Even if a contractor is not found guilty in a court of law, the business could still face significant legal costs. General liability insurance can help cover defense costs, such as attorney’s fees, settlement costs and similar expenses that may accumulate during the course of litigation.
What General Liability Insurance Does Not Cover
General liability insurance covers many aspects of a business’s normal operations. However, these policies do have their limitations. Before acquiring a general liability insurance policy, carefully read the terms of the insurance to see what is and what is not covered.
A general liability insurance policy will not typically cover a claim that is caused by the policyholder’s carelessness. For example, if a contractor knowingly uses unsafe or illegal building materials that cause bodily injury or property damage to a third party, the contractor may be held liable for any medical expenses or property damage that arises.
General liability insurance also does not cover injuries to a business’s employees. Instead, a contractor should carry workers’ compensation insurance to protect employees from unexpected injuries or illnesses. Workers’ compensation insurance provides wage replacement and certain medical benefits to employees who become injured or ill while working. In exchange for this benefit, the employee relinquishes his or her right to sue the employer.
How Much General Liability Insurance Costs
Cost is a common concern when contractors are shopping for general liability insurance. There are a number of factors that impact the cost of a policy, such as the size of the company. The more employees that a contractor has, the more liability coverage that the business will ultimately need to achieve comprehensive protection.
The type of work that the contractor performs will also factor into the cost of a policy. Contractors often face a higher level of risk than other types of businesses, which can result in slightly higher policy costs. Another factor that affects insurance costs includes location. Many states have strict policies that dictate the minimum amount of coverage that a contractor must have to legally accept jobs.
The specific projects that a contractor takes on will also influence the price of general liability insurance. Contractors performing work for the government will likely need more general liability coverage than contractors that perform work for local residents or businesses.
Request a Quote from Southern States Insurance
Buying a general liability insurance policy should never be rushed. It is important to carefully review the terms, exclusions and limitations of each policy in detail before making a decision. Contractors should also consider bundling their business policies to save money on insurance.
An experienced insurance broker can be of great help when shopping for general liability insurance. The qualified team at Southern States Insurance has more than 25 years of experience serving residents and businesses throughout the Southeast and the U.S.
For more information about what general liability insurance covers for contractors or to request an insurance quote, contact Southern States Insurance today.