The 5 W’s to General Liability Insurance Coverage for Contractors

General Liability Insurance for Contractors

General liability insurance is the perfect insurance type for contractors. They do not require a comprehensive BOP since they usually do not own the commercial building they are working on, which means there is no need for property insurance. In addition, they do not have lots of operational expenses or active payrolls. 

Therefore, general liability insurance is undoubtedly the perfect type of insurance for contractors both in Houston, Texas and the rest of the world. A few useful details covering the 5 W’s associated with liability insurance coverage for contractors are discussed below for your better understanding.

What Does It Cover?

The general liability insurance provides coverage for the following claims:

·       Bodily injury

In case one or more of your employees get injured while working in your business premises, you have a legal obligation to take care of their medical expenses which are usually covered by general liability insurance Houston TX.

·       Property damage

When you are carrying out a contract, there exists a chance that you might end up damaging another property in the vicinity, owned by someone else. However, general liability insurance takes care of it for you.

·       Data loss

With globalization and evolution of computers, data is being considered one of the most valuable assets owned by a business organization. In case you suffer from a data breach, general liability would compensate you for your losses.

·       Personal injury

Personal injury coverage by general liability insurance may include slander, libel, copyright infringement, and false advertising.

·       Disasters causing property damage

In case damage occurs to your property by some uncontrollable factors, such as theft, lightning strike, fire or other natural disasters, you can use your GL coverage. 

·       Rental property damages

General liability insurance also provides coverage for any damages caused to a rental property by your company.

·       Financial losses

When you are offering your services or products to a clientele, you might come across different financial crises and general liability insurance Houston TX would be there to help you get over them.

·       Failure to meet deadlines or deliver the end product

In case you are unable to deliver your promised service or product on time, general liability insurance would cover for you.

·       Liquor liability

If you own a business that is not associated with the manufacturing, distribution, furnishing, serving or selling of alcoholic beverages, you may use this coverage to take care of an accident that involves liquor.

What Limits Are Generally Available?

Just like the majority of the insurance coverage plans out there, different general liability insurance policies provide different limits and the maximum payable sums in the event of different claims. Minute risk assessment is very important before signing up for such a policy to make sure that the coverage is adequate and you will never have to pay out of your own pocket in case of an inconvenience.

For instance, consider a scenario in which you are being sued for an amount of $0.3 Million on account of a slip and fall injury. If your policy coverage is limited to $0.25 million, you would have to pay the difference out of your own pocket. Therefore, it is important to carry out a proper research in order to make sure that the equation is balanced.

What Businesses Might Need This Coverage?

General liability insurance may be availed individually as well as in collaboration with the business owner policy (BOP). Many contractors may also opt for a standalone coverage using a program known as the progressive Advantage Business Program. This type of insurance comes in handy for all business owners, but it proves to be the most effective for small business owners and contractors. Such sort of business owners cannot afford to deal with a lawsuit; but keeping in view the high frequency of accidents, there is a good chance that they might come across one soon. While small business owners might not be able to deal with the implications of a lawsuit, general liability insurance is there to make things much easier for them and help keep the business functioning. Moreover, some clients or employers may also require one to carry a specific amount of general liability so as to work for them.

What Is the Average Cost?

When it comes to the cost of general liability insurance policies, it may vary greatly depending on a number of factors, such as your business type, associated risks, etc. For instance, building contractors would naturally require a much larger coverage in comparison to someone who runs a marketing consultancy firm. The location of the business also influences the costs. Some of the work sites are considered to be a lot more dangerous and therefore they are liable for different types of claims, so they cost more than the comparatively safer sites. A CGL provider normally asks for the following information before calculating your premiums:

·         Location of the business

·         Previous claims history

·         Past and current business activities

·         Amounts of payrolls

·         Years you have been in business for

·         Type and size of the business

The minimum premium amounts usually start from somewhere around $350 per annum, but the majority of general liability insurance policies provided for small businesses may fall around $750-$2000 per annum, depending on the business type and the coverage requirements. Considering the amount of money you might end up saving through such policies, the amount seems pretty nominal.

In case you own a business that falls into a category with low risks, getting a BOP would be a good call since it serves as a collaboration of Property Insurance and General Liability Insurance whereas the premiums are usually nominal. If you currently own a BOP, it is recommended to get it rechecked in order to make sure you have the right coverage limits.

What Are the Benefits of Having This Type of Policy?

General liability insurance may benefit a contractor in a number of ways. Some of the most common ones are discussed below:

·       Asset protection

In case your business is alleged by a third party on account of a property damage or bodily harm, you might be sued to compensate for the liabilities. General liability insurance will protect all your assets by taking care of liabilities and pay for the damages so you do not have to get them out of your own pocket.

·       Survival in case something goes wrong

In a world of uncertainty, nothing is reliable. Even if we are highly careful, things might still go wrong within a matter of few seconds. Therefore, the best course of action is to get general liability insurance to save you from any unwanted situation. This kind of policies allows you to get back on your feet in case things go out of your hand.  

·       Protection for the whole business

General liability insurance provides protection for your whole business, including your employees and customers. Knowing the fact that your entire workforce is well protected from any kind of uncertainty, you get the peace of mind to excel in your business.

In the end, it may be said that general liability insurance is a must-have for small business owners as well as contractors. Rather than having to pay lots of money out of your own pocket in the event of a liability, let general liability insurance take care of it.

Keeping in view the current scenario of our society, the frequency of lawsuits is increasing with every passing day. Regardless of the fact that you own a small or a large business, only a single lawsuit might be able to take it down for good. Therefore, the right thing to do is to calculate your risks and operational liabilities, and get insured at your earliest convenience.