Chapter 4: What General Liability Insurance Does Not Cover
general liability insurance for contractors
- Workers’ Compensation – Employees’ injuries are covered under a separate workers’ compensation policy.
- Professional Errors – Professional liability insurance is needed to cover mistakes in service or design.
- Intentional Acts – Deliberate damage or fraudulent claims are not covered.
- Contractual Liabilities – Any liability assumed under a contract that is not standard business liability is excluded.
Chapter 5: Cost of General Liability Insurance for Contractors The cost of general liability insurance varies based on several factors, including:
- Business Size – Larger businesses with more employees and higher revenue tend to pay more.
- Industry Risks – High-risk trades, such as roofing or demolition, have higher premiums.
- Claims History – Businesses with frequent past claims face higher insurance costs.
- Coverage Limits – Higher policy limits result in increased premiums.
- Location – Insurance rates vary by state and local jurisdiction due to different regulations and risk factors.
On average, contractors pay between $500 and $2,500 annually for general liability insurance, though these costs can fluctuate based on the factors mentioned above.
Chapter 6: Choosing the Right Insurance Policy When selecting a policy, contractors should consider:
- Coverage Limits – Ensure the policy provides adequate protection for potential risks.
- Exclusions – Understand what is not covered to avoid surprises.
- Insurance Provider Reputation – Work with a reputable insurer with strong financial stability.
- Policy Flexibility – Look for options that allow adjustments as the business grows.
- Additional Coverage Options – Consider adding endorsements such as tools and equipment insurance or commercial auto coverage.
Chapter 7: Claims Process and Risk Management
- Filing a Claim – Contractors should report incidents promptly, provide detailed documentation, and cooperate with the insurance company.
- Common Reasons for Denials – Claims may be denied due to late reporting, policy exclusions, or insufficient evidence.
- Risk Management Best Practices – Contractors can reduce liability risks by following safety protocols, training employees, using contracts with indemnification clauses, and maintaining proper documentation of all work performed.
Conclusion General liability insurance is indispensable for contractors, protecting against financial loss and legal disputes. It safeguards businesses from unforeseen accidents and enhances credibility in the industry. By selecting the right policy and implementing strong risk management strategies, contractors can secure their business and focus on delivering quality work.
