General Liability Insurance for Contractors

Running your contracting business is rewarding, but it also comes with its risks. Accidents happen, whether it’s a spilled can of paint damaging a client’s property or someone slipping on a job site. These unfortunate events can lead to costly lawsuits or claims that could impact your business financially. That’s where general liability insurance for contractors steps in to safeguard your livelihood, offering essential protection and peace of mind.

This blog will walk you through why general liability insurance is a must for contractors, what it covers (and doesn’t cover), the factors that influence its cost, and tips for obtaining the right policy. Whether you’re just starting your contracting business or evaluating your current coverage, this guide will help you make informed decisions.

Why Contractors Need General Liability Insurance

Contractors work in dynamic environments with inherent risks. Here are the key reasons general liability insurance is essential for your business:

Protect Your Finances

Even small mistakes on the job can lead to significant financial consequences. Liability insurance ensures that the costs of defending against lawsuits and settling claims don’t come out of your pocket.

Meet Client and Legal Requirements

Many clients and government contracts require proof of liability insurance before awarding work. Holding this insurance can help you secure more projects.

Build Trust with Clients

Having insurance shows clients that you are a professional who values responsibility and readiness to handle unforeseen issues. It’s a mark of credibility that sets you apart from uninsured competitors.

Peace of Mind

The right insurance allows you to focus on your projects without constantly worrying about potential accidents or mishaps.

What General Liability Insurance Covers

General liability insurance is designed to protect contractors from a wide range of risks. Typically, it includes coverage for the following:

1. Property Damage

If you or your employees accidentally damage a client’s property, liability insurance can cover the repair or replacement costs. For instance, if you’re installing drywall and damage a client’s flooring in the process, the policy steps in to handle the expense.

2. Bodily Injury

If a third party, such as a client or visitor, is injured at your worksite, your policy covers medical expenses and potential legal fees. For example, think about a toolbox falling from a height and injuring someone. Liability insurance provides crucial support in these situations.

3. Advertising Injury

This lesser-known coverage protects against claims like copyright infringement, defamation, or slander arising from your business’s advertising.

4. Legal Fees and Settlements

Liability insurance typically includes coverage for costs associated with lawsuits, including attorney fees, court expenses, and settlement payments.

What General Liability Insurance Does Not Cover

While it covers many risks, it’s important to understand the exclusions of general liability insurance. It typically does not cover:

Employee Injuries

If your own employees are injured on the job, this is covered by workers’ compensation insurance, not general liability insurance.

Damage to Your Work

If something goes wrong with the work you provided, like improper installation, liability insurance generally won’t cover repairs or replacements. A separate professional liability policy might be needed.

Tools or Equipment Damage

If your tools or machines are damaged or stolen, you’ll need commercial property insurance or inland marine insurance to cover the loss.

Commercial Auto Accidents

Accidents involving business vehicles are outside the scope of general liability insurance and require commercial auto insurance.

Understanding these exclusions will help ensure you obtain additional coverage where necessary.

Factors Affecting the Cost of General Liability Insurance

Several factors influence the cost of liability insurance for contractors. While rates vary by provider, these are some of the key considerations:

Business Size and Revenue

Larger businesses or those with higher revenue often pay more for coverage since they pose a higher risk.

Industry and Risk Type

Different contracting trades, such as roofing or electrical work, come with varying levels of risk. High-risk trades typically have higher premiums.

Coverage Limits

The higher the coverage limit you choose, the more expensive the policy. Standard small business policies often start with a $1 million per occurrence limit.

Location

Your business’s location affects the cost of insurance, as legal and environmental risks vary across states or local areas.

Claims History

Frequent claims or lawsuits in your past can increase your premium, as insurers perceive this as a higher risk.

How to Get General Liability Insurance

Getting the right insurance doesn’t have to be difficult. Follow these steps to secure the best policy for your needs:

1. Assess Your Risk

Start by identifying the specific risks your contracting business faces. Consider past accidents, property damage incidents, or disputes you’ve encountered, and estimate the possible costs that could arise.

2. Compare Providers

Research multiple insurance companies to find the best fit. Look for trusted providers with expertise in contractor insurance (such as Toth-Felty Insurance Agency) and compare their policies, limits, and pricing.

3. Work with an Agent

Insurance can be complex, and an expert agent can make the process much easier. Independent agents are particularly helpful because they work with various insurers to find policies tailored to your specific needs.

4. Bundle Policies for Savings

If you need multiple forms of coverage, such as workers’ compensation or commercial property insurance, consider bundling them for potential discounts.

Why Choose Toth-Felty Insurance

At https://tothfelty.com, we understand the unique challenges contractors face. With over many years of experience, we help contractors like you protect their businesses with customized general liability insurance policies. Here’s why you should choose us:

Independent Agents

We partner with a wide array of reputable insurance companies to create your ideal policy, offering personalized attention you won’t get from larger providers.

Competitive Pricing

We work to find policies that offer exceptional coverage at a price that fits your budget.

Local Expertise

Based in Middleburg Heights, Ohio, we’ve been serving local businesses since 1971. We know the local laws and risks, ensuring your coverage is tailored to your area.

Commitment to Relationships

For us, serving clients isn’t just about business; it’s about trust and building lasting partnerships.

Visit Toth-Felty Insurance to get a free quote and explore your options.

Protecting Your Contracting Business

General liability insurance for contractors ensures that unforeseen risks don’t derail your contracting business. From covering accidents to enhancing your professional credibility, it is a must-have for any contractor.

By understanding what it covers, shopping for the right policy, and working with experienced providers like Toth-Felty Insurance, you can safeguard your business’s future and focus on growing it with peace of mind.