It is a necessity for any company in the process of construction or renovation to acquire contractors insurance to safeguard its financial stability, as well as the well-being of its workers. It is not in the interest of the company to leave it susceptible to financial drains, in case of management, material and labor problems. To be sure, there are many risk factors present on a construction site, all of which could harm a business if not properly addressed. Sure, the contractor may be held responsible for some of the problems, but most losses will be incurred by the property owner. Also, most states in the US require that they be insured before a project license is granted.
Contractors insurance basically covers losses from lightning, vandalism, fire, lawsuits, injuries, and other property damage not caused by professional error or intentional acts. But there are certain policies that do not indemnify against earthquakes, acts of violence and floods. The safest plan you can apply for is general liability contractor insurance, as it usually takes care of all the basic concerns, when it comes to this type of activity. It is generally the responsibility of the building owner to purchase builder’s risk insurance and determine its coverage. But, the general contractor can also be in charge of buying it, as stipulated in the contract. It is important to note that this type of property insurance is only valid during the construction period and ends upon completion of the project.
To make sure you get the best policy, it’s a good idea to shop around before settling with one provider. Submit your contracts for quotes if you’re a contractor and negotiate your policy rate if you’re a business owner. This should help you come up with a manageable monthly payment term that addresses your construction needs as well as your monetary constraints.
Next, you should evaluate the supplemental general status of your contractors general liability insurance to see who is covered. There are a number of other people who can enter a job site, besides builders. You can expect couriers, trespassers, licensees, and some guests to drop in from time to time, so they should be added as policyholders as well. To reduce your exposure to liability, what you can do as a contractor is determine the regulations within the job site, enter into an agreement with the client, and try to be practical with any visitors, to prevent potential accidents from occurring. It would also be wise to keep the site as hazard-free as possible by disposing of all materials carefully.
Finally, never hesitate to use a specialist contractor insurance broker. This should make applying the policy less onerous. A business owner and contractor would find a broker’s meticulous eye for detail and expansive network very helpful, especially for tight projects. Obviously, both cannot spend the proper amount of time to go over every single policy and come up with proposals. A broker will help you achieve this and place you with the right provider or providers as soon as possible.