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Liability claims are among the costliest claims against business owners. According to research, the average cost of a single minor injury to a third party can be $20,000. Maybe your business is just getting started or you have good margins. However, repeated liability claims could bankrupt your business if you don’t have the right insurance coverage.
While business owners understand the importance of having general liability insurance, most of them are unaware of what the coverage entails. General liability insurance helps protect your business against financial loss. In this guide, we’ll go over the main benefits of having general liability insurance for your business.
What is Contractors Liability Insurance?
Contractors’ liability insurance provides protection against bodily injury, property damage or publicity damage to third parties. A third party is someone who does not work for you. This includes visitors to your site, delivery people or even your customers. If they sue you and claim your business is responsible for their injuries or property damage, general liability insurance will cover you in case they find you guilty.
However, it is important to remember that general liability insurance covers injury-related expenses for third parties. It does not cover work accidents of your employees. To protect your employees against work-related injuries or illnesses, you should purchase workers’ compensation insurance.
7 Great Benefits of Contractors General Liability Insurance
Use your contractors liability insurance in the following circumstances:
1. Claims for damages to a third party:
An example of this would be if you were removing shingles from a roof and a strong gust of wind occurred. If the shingles fell off and injured the pedestrian, you would be responsible.
2. Claims for damage to property belonging to a third party:
This includes damage to your client’s property caused by you or your employees while working on a project.
3. Completed Product Claims:
For example, if you were working on a roofing project and by mistake your job leaves a leak in the roof. When a severe storm hits, water drips into your client’s living room, causing thousands of dollars in water damage.
4. Damage to reputation:
Your general liability insurance helps protect your business against certain claims of wrongful arrest, malicious prosecution, defamation, slander, wrongful eviction, violation of privacy rights, and more. For example, advertising your work using images from past projects without your clients’ consent. If they sue your business, your general liability insurance policy will cover you.
5. Advertising injury:
Your contractors liability insurance helps protect your construction business from claims if others accuse you of infringing their copyrights while advertising goods, products or services in your advertising campaigns, social networks or your websites. For example, when you use an image that you find on the Internet and modify it to adapt it to your promotional campaigns. If they take legal action against you for violating the copyright policies, you will be provided with an attorney to defend you and the costs will be covered.
6. Damage to premises rented to you:
It protects your business against certain claims for damage caused to the premises you have rented. So if you are renting premises and there is damage caused by an accidental fire, your contractors liability is there to cover the costs caused by the damage.
7. Immediate Claims for Third-Party Medical Expenses:
A visitor or customer is injured on your property. If they need immediate medical attention, this will help cover that cost. Typically, this is a “goodwill” gesture from an insurance perspective. Insurance companies believe that if you compensate for immediate medical expenses, such as a trip to the emergency room, it reduces the chances of a lawsuit at a later date.
Get general liability insurance protection for contractors
When injuries occur and you receive complaints against your construction company, you could be in trouble even if it’s not your fault. Just in case your contractor business is at fault, you could end up paying large sums of money in compensation and legal or medical bills. The good news is that general liability insurance will help cover all of this and more, so you can stay focused on running your construction business.
Do you have further questions about general liability insurance? Contact the construction insurance experts at Entrepreneurs Liability. Call 888-676-0923