Reasons Why You Need Contractor General Liability Insurance

Contractor

A good project manager always seeks to mitigate risk and protect their investment. One of the best ways to do this is by ensuring that your contractor has the proper insurance.

General liability insurance protects your contractor against claims of bodily injury or property damage arising from their work. If someone is injured on the job site or the contractor damages a client’s property, the insurance will cover the costs of medical treatment or repairs. Let’s take a closer look at why you should ensure your contractor has this insurance.

Accidents Happen

No matter how safety-conscious your contractor is, accidents can still occur. If someone is injured on the job, you could be liable if your contractor doesn’t have insurance. This is why ensuring your contractor has general liability insurance is crucial. Some common accidents include slips, trips, and falls; scaffolding collapses; electrical shocks, and more. If any of these accidents occur, and your contractor doesn’t have insurance, you could be on the hook for medical bills and other damages. This often brings confidence to the hiring party that risks are being taken care of and they do not have to worry about anything going wrong.

In addition to bodily injury, general liability insurance also covers property damage. If your contractor accidentally damages a client’s property, their insurance will cover the costs of repairs. This can help avoid any legal issues arising from the property damage. Without insurance, you would be responsible for paying for the repairs out of your pocket. This could quickly become expensive, and it’s not worth the risk.

Protection Against Lawsuits

In addition to accidents, your contractor could be sued for defamation, false advertising, and more. If your contractor doesn’t have insurance, you could be liable for any damages awarded in a lawsuit. This is why it’s vital to ensure your contractor is adequately insured.

General liability insurance will protect your contractor against a variety of different lawsuits. This type of insurance will pay for the costs of a lawyer and any damages awarded in a lawsuit. This can help to protect your contractor from financial ruin in the event of a lawsuit. However, before getting any insurance, speak with experts on the best insurance company to target.

Take your research online, whereby you will land on different sites with varying opinions. The most reputable and well-reviewed insurance companies should be your go-to. You can get quotes from different insurance companies, which will help you determine the best rate. The quotes should be based on the coverage you need and the type of work your contractor will be doing. Make sure you understand the policy’s terms and conditions before purchasing it.

Compliance with the State Law

In some states, it is required by law for contractors to have general liability insurance. If your contractor doesn’t have insurance, they could be subject to various penalties. These penalties can include fines, loss of license, and more. In some cases, the state may even require you to pay for any damages awarded in a lawsuit.

It’s essential to check with your state to see if they have any laws regarding contractor insurance. If they do, make sure your contractor complies. It’s not worth the risk of not being adequately insured.

Protection from All Third-Party Claims

When you hire a contractor, you enter into a contract with them. This contract protects you from third-party claims that may arise from their work. However, this contract does not protect you from claims directly against your contractor.

This is where general liability insurance comes in. This type of insurance will protect you from any claims against your contractor. It includes claims for bodily injury, property damage, and more. Without this insurance, you could be on the hook for damages yourself.

Advertising Claims

With the rise of false advertising claims, it’s more important than ever for your contractor to have general liability insurance. If someone claims that your contractor made false or misleading statements in their advertising, you could be held liable. This type of claim can be very costly and not worth the risk.

Ensure your contractor has general liability insurance to protect them from these claims. This type of insurance will pay for the costs of a lawyer and any damages awarded in a lawsuit. It can help to protect your contractor from financial ruin in the event of a false advertising claim.

Theft and Vandalism Claims

You could be held liable if your contractor’s tools or equipment are stolen or vandalized. This is because your contract with your contractor does not protect you from these claims. Without insurance, you would be responsible for paying for the replacement of the stolen or vandalized items.

The insurance will pay for the cost of the replacement items, as well as any other damages that are incurred. This type of insurance can help to protect you from a financial burden if your contractor’s tools or equipment are stolen or vandalized.

Builds Reputation and Establishes Trust

Hiring an insured contractor shows that you are willing to trust them with your property. This can help to build rapport and establish trust between you and the contractor. It can lead to a better working relationship and a higher quality of work.

It’s important to remember that not all contractors are insured. Make sure you ask about their insurance before you hire them. It helps ensure that you work with a reputable contractor in your best interests.

Protection Against Bankruptcy

Protection Against Bankruptcy

If your contractor files for bankruptcy, you could be left without recourse. It is because the contract you have with them would be void. Without insurance, you would be unable to collect any damages awarded in a lawsuit.

At times, bankruptcy can be unavoidable. However, you can help to protect yourself by making sure your contractor has general liability insurance. This type of insurance will pay for the costs of a lawyer and any damages awarded in a lawsuit.

It’s essential to make sure your contractor is adequately insured. General liability insurance will protect your contractor against a variety of different lawsuits. This type of insurance can help to protect you from a financial burden if your contractor is sued. Make sure you ask about insurance before you hire a contractor. This will help ensure that you work with a reputable contractor with your best interests in mind.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.