Insurance

Contractor General Liability Insurance

Posted on by Roland Williamson

General Liability is a type of insurance policy that offers protection against third party injuries such as negligence, property damage, bodily harm, or injury, or loss of limb or life. It acts like a stable coverage base and a foundation for strong defense for contractors. It is a requirement before a contractor can begin any construction job and cover liabilities that would result from faulty work or other third party claims.

Why does a contractor need General Liability insurance?

The construction industry does have risks, and one of the most significant risks is third party injuries. They include lawsuits for accidents, medical bills, or property damage and construction defect claims. Some of these claims are very costly. Contractors insurance California offers protection in many different situations in case something goes wrong, and your company is to blame.

Contractors face high risks, and this type of insurance help pay expenses related to the different kinds of risks. For instance, if property damage occurs during innovation, or a visitor gets injured at your job site, the insurance can cover the cost of repairs or medical bills.

How contractor General Liability insurance protects homeowners

A general contractor is responsible for the quality of workmanship, safety, legal compliance, and everything that happens on the job site. Failing to hire a contractor with General Liability insurance could potentially cost you everything that you own. If the unexpected happens, you could be sued and end up declared bankrupt. Once state laws declare bankruptcy, you are only allowed to keep a minimal amount of wealth, including property.

Damages involving a contractor working on your home, such as faulty works, may not be covered by your homeowner’s insurance. In such a situation, the contractor’s General Liability insurance comes in handy. If accidentally, the contractor’s work causes damages to your home, such as house fire, most likely, your homeowner’s insurance company will do the repairs but reach out to the contractor’s insurance company for reimbursement.

If a contractor does a poor job, for example, improperly installing roof shingles, a standard policy won’t rectify such a situation because most exclude inadequate workmanship from its protections. A contractor with General Liability insurance would have to redress that by either replacing or repairing the shingles.

Your homeowner’s policy may not cover additions or newly built rooms. It only covers your existing home. Builders risk insurance provides coverage during home remodeling. This gives you the peace of mind knowing your coverage couldn’t help cover your whole house just in case of the unexpected.

When renovating your home, you make a lot of decisions. It’s essential to partner with the right contractor to ensure sufficient insurance coverage.

Risks of hiring contractors without General Liability insurance

If a contractor is injured on your property, you as a homeowner can be sued. This can happen when the contractor does not compensate workers. When you hire a contractor that does not have the proper insurance coverage, you will be assuming all the risk of any injuries or work mistakes that may occur at home.

Accidents happen far too often. If your contractor doesn’t have a General Liability, who will pay for the extra damage to your home? Do you expect a contract that couldn’t pay for insurance coverage to now pay additional money? Will you take him to court to recover damages? Who will pay for the attorney fees? There are so many questions, but still no answers.

Generally, contractors who don’t value worker’s compensation liability or coverage have much fewer costs than adequately licensed contractors. But, if an accident were to happen, as the homeowner, you could end up losing a lot more. The potential risk of hiring a contractor who doesn’t have a General Liability policy outweighs the benefits.

To sum it up, homeowners can protect themselves from liability by hiring only licensed contractors and confirming thy have the proper insurance coverage in place before the work begins. The best defense is to do your homework upfront and get to know how contractor general Liability protects homeowners. Make sure the contractor you hire has insurance coverage and, in this case, contractor general liability insurance.

Always Make Your Contractor Shows Proof of Insurance
Insurance

Always Make Your Contractor Shows Proof of Insurance

Posted on by Roland Williamson

Dr. Phil likes to say that if you choose the behavior, you’ve also chosen the consequences. Projects involving contractors are one of the cases where Dr. Phil’s perception fits perfectly. Such projects are often big ones, and (God forbid) if something goes wrong, the chances are that the damage could be costly, financially. The worst-case scenario is that someone’s life may be in danger. To avoid all these unnecessary complications ask contractors for insurance, and to help you understand how serious this is, let me point out a few things.

It’s Not My Fault!

That’s what your contractor will either imply or say explicitly and without shame, if you make the mistake of hiring one without insurance. But what is the significance of the contractor providing proof of insurance in the first place?

Accidents happen, and when they do, someone has to be held responsible, and someone has to pay for the damages. You don’t want that person to be you, especially if it is not your fault.

What Insurance?

Any contractor hired for a project ought to be in possession of a General Liability Insurance. Moreover, if he or she will involve subcontractors, carpenters, electricians or any other workers in the project, he or she should also have Workers Compensation Insurance and Auto Coverage Insurance (only if vehicles will also be involved).

General Liability Insurance is a guarantee that the contractor will take care of any damages that take place while working on your project. The Workers Compensation Insurance is for handling any accidents that involve the third parties the contractor brings into the project. The auto or car insurance does what you already know; takes care of any vehicle-related damages.

What You Stand to Lose

Now, if for some reason you were ignorant and happened to hire a contractor without confirming their status as far as being insured is concerned, if some accident occurred while they are working on your project, believe it or not, they might sue you.

They’ll say the accident was your fault; that it was your house, or office, or poor working conditions, or whatever they’ll come up with for pinning the blame on you, just to avoid paying for the damages. I’m sure that doesn’t sound nice at all, and it’s a situation you don’t want to deal with. The damages could be in terms of thousands of dollars or millions. Again, worst case scenario, it could involve someone’s health.

Another danger of hiring a contractor without proof of insurance is that they may disappear before completing the project. This scenario is particularly true if you happen to be loaded such that you pay them in excess before they complete their task.

Protect Yourself, Protect Your Assets

You can see that you stand to lose way too much just for ignoring this essential aspect of the client-contractor relationship.

Ask contractors for proof of insurance before hiring them for your project. It’s that simple; just ask them for it. If a contractor indicates that they have none or start behaving funny regarding your reasonable request, keep looking; that person’s troubles are not worth your time and money.

Furthermore, if a contractor seems cheap, and you haven’t yet confirmed whether they are insured, the chances are that they are not. Important projects should cost as much as their degree of significance.

When dealing with expensive projects, you should always take the necessary measures to ascertain that you only pay for what the project is worth; not unnecessary extra damages. Always ask your contractors to provide proof of insurance before engaging in such crucial projects.