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What Business Insurance Policies Do General Contractors Need?

Wondering if you should invest in business insurance?

Any company that employs staff needs business or commercial insurance. It’s important to protect yourself and those who work for you. However, there’s a misconception that general contractors don’t need business insurance.

Injuries and damages can be expensive for all parties involved, especially if it concerns a lawsuit. General contractor business insurance allows you to stay a step ahead. But what exactly does getting insurance mean for business contractors?

If you want to protect your business, this is the guide you need. Learn everything you need to know about small business insurance below.

Why You Need Contractor Business Insurance

Business challenges can range anywhere between practical and legal. As general contractors, you’ll often end up in unfamiliar places and job sites. Of course, your staff won’t be 100% out of their depth in terms of the nature of the job.

What will be different is the physical space and even the equipment they work with. You also have to consider the specific safety hazards the hiring company has. A different SOP could also throw your contractors for a loop.

This all amounts to general uncertainty. Uncertainty is the favorite precondition for mistakes and accidents. Contractor business insurance offers protection from those unknowns.

If one of your employees goes to a new job site and gets hurt, you and the person involved will have coverage. You can extend similar benefits to the equipment the contractors bring to the job. Any damages will get covered immediately, giving everyone time to process and make necessary changes or fixes.

Business or Commercial General Liability

Having some kind of contractor liability insurance is a good idea. This breaks down into several categories which protect your company and employees.

This type of insurance protects you from any claims against you for damages. The hiring company might sue for damages if your contractors cause accidental damage at a job site. This is where business liability insurance comes in.

This protection extends beyond general property damage. It includes injury or accidental harm to other workers during a job or on work premises. This would cover anything that happened while working at the hiring company, as well as on your own.

The only caveat is that the injuries or damage would have to be related to the operation of the business. Examples include a machine malfunctioning or a recently installed pipe bursting. What’s so great about business general liability insurance is it covers many accidents.

Some of these, like malfunctioning equipment, are beyond anyone’s control. In most cases, insurance would cover any injury, damage, or loss of profits.

Business insurance covers damages and injuries sustained by the client after you’ve left. A good example is if you install a new staircase or ramp, and one client slips on it after you’ve installed it. Commercial general liability protects you from any potential 3rd party lawsuits.

Workers’ Compensation Insurance

In New Jersey, general contractors must have worker’s compensation insurance. Workers’ compensation insurance covers the costs associated with an injured employee. This means lost wages they would have earned, but also medical bills and associated costs. Many job sites that use contractors carry significant risks of personal injuries. For example, some jobs, like construction, are more hazardous. Not having this insurance will lead to lawsuits by injured employees seeking damages.

With workers’ compensation, there are four major costs that it covers. The first is medical expenses associated with an injury. It could be an accident by the worker or an oversight by the hiring company. It could even be something you, as a general contractor, failed to notice.

The deeper investigation into the injury and what to do about it is a matter for the future. In the short term, there are hospital bills to pay. Worker’s compensation insurance softens the financial blow by covering those fees and costs.

The other major categories are costs associated with rehab, lost income, and death. Rehab is straightforward, as it can relate to physical rehab from an injury. Lost income and death are tricky.

Lost Income and Death

These two areas are where you’ll find a lot of flexibility. A large part of this will be up to your generosity as an employer for what you offer your workers.

With lost wages, some general contractors offer to cover everything from maternity leave to mental health or sick days. In these more generous cases, the worker doesn’t have to be physically injured.

In the event an employee dies, especially at work, it’s customary to have something for the family. This can range from chipping in for funeral costs to covering all the associated costs. Some companies offer a lifetime stipend for widows or child dependents.

The degree to which your business insurance can be generous to your employees will vary. It will depend on how much your company can afford to sign up for and the feasibility of doing so.

The Benefits of Business Insurance for General Contractors

There are significant benefits of business insurance for general contractors. Beyond being an issue of legal compliance in some parts, it also protects you and the company in case of an injury or damage to property. This would be true regardless of whether the injured party or the damage was yours or not.

When deciding what kind of business insurance you need, it helps to trust the pros. At the Oliver L.E. Soden Agency, we offer our many years of experience to help you make the right choice. Contact us today to find out more.