No matter how large or small the job in the building trade is, it’s always the best policy to carry insurance again liability for losses from injuries, accidents, or property damage during construction.
Residential building contractors need a Liability policy to protect them from lawsuits from homeowners for construction-related losses, or from workers injured on the job. Make sure that your contract requires every sub to carry their own Liability insurance and exempt you from responsibility from damage they might produce during construction. The amount of coverage you need will depend on the size of the contract. As a rule of thumb, it’s wise to have two or three times the size of the project budget.
Commercial contractors usually carry millions in Liability insurance. Contractors with higher risk of damages (for example, roofers or contractors in highly specialized trades) often take out higher coverage.
Your Liability policy will set coverage amounts (limits) for both each occurrence and overall (aggregate) values. Limits are also set for: 1) fire damage to property under construction; 2) medical expenses for injured workers on the jobsite who might not be covered under Workers Compensation; and 3) personal and advertising injury (claims that promotion or advertising caused a financial or personal loss to the owner of the home or building).
While many contractors pay their Liability premiums up front, those with cash flow problems others prefer to finance them through an indemnity corporation with a down payment and monthly payments over six months to a year.
As always, our insurance experts stand ready to help you find comprehensive Liability coverage at a rate you can afford. Feel free to get in touch with us at any time.