For most contractors, general liability insurance is a no-brainer. They typically ask only the following questions of their agent:
- Will it pay if someone sues us for injuries?
- Will it pay if someone sues us for property damage?
- Will it satisfy the licensing department in my state?
Commercial General Liability Insurance will benefit nearly every small business, and it’s generally one of the initial policies a contractor will purchase. Most business owners know that it will cover third-party bodily injuries or property damage. In fact, in some industries, it’s referred to as “slip-and-fall insurance” because it covers you if a customer or visitor slips and falls on your premises.
However, did you know that Commercial General Liability can easily cover a lot more than that? Here we look at five reasons why your GL policy could be a great deal more valuable than you may have thought.
1. Medical Expense Coverage
Certainly, the policy will provide coverage when a third party sues after they trip and fall in your office building or at the job-site, but it’s more beneficial to try to avoid legal action in the first place. This is why most Commercial General Liability policies come with medical expense coverage, which will pay for the expense of medical treatment when another person other than an employee is injured on or in your business property or job site.
It can pay for ambulance costs, doctor’s bills, and more. The desire is that if the immediate medical bills are settled early on, the injured person may not take legal action against you later on. Remember, under your medical expense coverage, proof of liability is not required.
2. Products-Completed Operations
Does your business make or install any products? Whether you make trusses or cookies, your company is liable for the physical harm your products might cause. If you are sued over an injury that is the result of a product you produced, your Commercial General Liability policy with Products-Completed Operations coverage will cover you for the defense costs. This also applies to completed services (installations) also, so long as the claim does not fall within the jurisdiction of Professional Liability or Malpractice Insurance.
3. Advertising Injury Coverage
The General Liability policy doesn’t solely cover physical damages your contracting business might cause. It can also cover advertising injuries as well, such as legal actions brought libel, slander, violation of privacy rights, and copyright infringement. For instance, the coverage would definitely come in handy if someone alleged your local TV commercial illegally used their music or soundtrack or if you end up saying some untrue or insulting things regarding a competitor on your business’s social media page.
4. Contract Liability
When you enter into various kinds of contracts, your General Liability policy will probably cover the liability that your contracting business assumes. These types of contracts include building leases, elevator maintenance agreements, easement-of-license contracts, and ordinance-mandated agreements to indemnify a municipality. This is certainly additional liability risk, and risk that you can mitigate with your General Liability coverage.
5. Coverage for Others
Your contractor General Liability Insurance can easily provide insurance coverage for others. It can provide full or partial coverage for your business partners, executive stockholders, directors, subsidiaries, employees, contracted vendors, new acquisitions, and volunteers. You might have to set this up before you purchase the policy, but should know that the coverage exists if you need it.
Certainly, to purchase the proper general liability coverage, you need to have a conversation with your agent about the risks your business is likely to encounter. Knowing which risks your business must deal with and which questions to ask your agent will put you in a much better position to make an informed decision.
Fairbanks Insurance Brokers are experienced and prepared to offer advice about contractors’ everyday risks and offer affordable mitigation solutions.
Here is What We Recommend
General Liability: Contractors General Liability will be the foundation of protection for your business. The coverage will respond if you or your employees are found liable for bodily injury, property damage, or have a products/completed operations complaint. The coverage also covers defense costs for your business to respond to any lawsuits brought by a third party.
Workers’ Comp: Many states will require contractors to provide workers’ compensation coverage for their workers before they can begin a project. Accidents will happen at the job site that can result in an employee becoming injured and missing work. Your workers’ compensation coverage will provide financial assistance for medical expenses and lost wages.
Surety Bonds: It’s very likely that your state will require you to be licensed before you can begin operations. Most states and customers will require contractors to offer a license or a surety bond before you are allowed to bid on a job or begin working.
Commercial Auto: Typically, most contractors will have light and heavy vehicles that require commercial auto insurance to make certain their vehicles can be repaired or replaced in the event of an accident, vandalism, or theft.
Tool Coverage: Also known as Inland Marine Insurance, this policy will provide for reimbursement for expenses to repair or replace tools and equipment. Your tools represent an important part of your livelihood, so we always encourage carpentry contractors to consider this valuable coverage.
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