It is a necessity for any business undergoing construction or renovation to purchase a contractors insurance in order to safeguard their financial stability, as well as their workers’ wellbeing. It’s not in favor of the business’ interest to leave it susceptible to financial drains, in case of management, materials, and manpower problems. There are certainly a lot of risk factors present in a construction site, and all of these could very well hurt a business, if not properly dealt with. Sure, the contractor may be held liable for some of the issues, but most of the losses will be incurred by the property owner. Besides, majority of the states in the U.S. demand that they are secured, before a project license is granted.
Contractors insurance basically covers losses due to lightning, vandalism, fire, lawsuits, injury, and other property damages that are not caused by professional errors or intentional acts. But there are certain policies that do not indemnify against earthquakes, acts of violence, and flooding. The safest plan that you can apply for is a general liability contractor insurance, since it typically takes care of all of the basic concerns, when it comes to this type of activity. Usually, it is the building owner’s responsibility to acquire a builder’s risk insurance, and ascertain its scope. But, the general contractor can also be tasked to buy 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 is terminated upon the project’s completion.
To ensure that you are getting the best policy, it is advisable that you shop around for options, before you settle with a provider. Submit your contracts for quotes if you are a contractor, and negotiate the rate of your policy if you are the business owner. This should help you arrive at a manageable monthly payment term that addresses your construction needs, as well as your monetary limitations.
Next, you should assess the supplementary general condition of your general liability contractor insurance, so that you know who are covered. There are a number of other people who may enter a job site, aside from the builders. You can expect messengers, trespassers, the licensees, and some invitees to come along every once in a while, so they must also be added as insured. To reduce liability exposure, as a contractor, what you can do is determine regulations within the job site, arrange an agreement with the client, and try to be hands-on with any visitation, to pre-empt any potential accidents from happening. It would also be smart to keep the site as hazard free as possible, by disposing all of the materials carefully.
Lastly, never hesitate to use a broker specializing in contractor insurance. This should make the policy application less burdensome. A business owner and contractor would find a broker’s meticulous eye for detail and expansive network very helpful, especially for stringent projects. Obviously, you both can’t dedicate the right amount of time to go over each unique policy and draw up proposals. A broker will help you accomplish that, and set you up with the right provider or providers as soon as possible.