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General Contractor Insurance
General contractors are responsible for overseeing construction projects and coordinating the work of subcontractors. While this can be a rewarding and lucrative profession, it also comes with several risks and potential liabilities.
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Concklin Insurance Agency understand the unique risks of General Contractors. We have been providing insurance solutions to small businesses for over 30 years as Independent Insurance Agents. We have built relationships with over 40 regional and national insurance companies to make sure we can provide the right insurance at a competitive rate.
We value hard work and dedication which is why we hire Trusted Insurance Advisors and Licensed Insurance Professionals to assist you with every step of the insurance processes.
We focus on insurance so you can focus on getting the job done.
Risks for General Contractors
- Property damage: General contractors may be held liable for any damage that occurs to a construction site or surrounding property during the course of a project. This could include damage to buildings, structures, or personal property.
- Injuries: General contractors are responsible for ensuring the safety of their workers and anyone else who may be present on the construction site. If someone is injured on the job, the general contractor could be held liable for medical expenses and other damages.
- Delay and disruption: If a construction project is delayed or disrupted due to factors beyond the general contractor's control, they may be held responsible for any resulting losses or damages.
- Defective work: If a construction project is not completed to the required standards, the general contractor may be held liable for any resulting problems or defects.
- Breach of contract: General contractors may be held liable if they fail to fulfill their obligations under a contract, such as completing a project on time or within budget.
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Insurance Coverages for General Contractors
To protect themselves from these and other risks, general contractors should consider the following insurance coverages:
- General liability insurance: This coverage protects against claims of property damage, injuries, and other liabilities that may arise from the general contractor's operations.
- Builder's risk insurance: This coverage protects against damages to a construction project during the course of the work.
- Workers' compensation insurance: This coverage provides medical and financial benefits to workers who are injured on the job. It is required in most states.
- Professional liability insurance: Also known as errors and omissions insurance, this coverage protects against claims of defective work or breach of contract.
- Commercial Property Insurance: Depending on your operations your property exposure is likely limited to an office and possibly a yard to store building materials or equipment. If materials are stored on site, such as lumber or bricks, there is an increased risk of fire, weather damage, vandalism, and theft that should be considered in your policy. It is important to have your Commercial Property Coverage tailor to your operations.
Additional Coverages to Consider
In addition to these standard coverages, general contractors may want to consider the following:
- Business interruption insurance: This coverage provides financial protection if a construction project is disrupted or delayed due to factors beyond the contractor's control, such as natural disasters.
- Cyber liability insurance: With the increasing reliance on technology in construction, general contractors should consider coverage for data breaches, cyber attacks, and other cyber risks.
- License and Permit Bonds: Some clients' general contractors obtain financial guarantees for the completion of projects and payment of labor and supplies.
- Commercial Auto: All Commercial leased vehicles should have a Commercial Auto Policy. If you are using your personal vehicle to transport equipment and supplies, you should verify that your personal auto policy offers adequate coverage.
- Equipment Floater: An equipment floater provides coverage for portable or moveable equipment. Equipment floaters are typically purchased by businesses who use expensive equipment that is essential to their operations. his can include things like excavators, bulldozers, cranes, and other heavy machinery used in construction projects.
By properly insuring their business, general contractors can better manage their risks and ensure the success of their projects. Talk to one of our trusted Insurance Advisors about your business and we will help you find the coverages that are unique to your risks
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Frequently Asked Questions
What insurance do contractors need?
Most contractors need a combination of insurance policies to protect their business. The most common include general liability insurance, workers' compensation (if you have employees), commercial auto insurance for work vehicles, and tools and equipment coverage.
Some contractors also carry builders risk or umbrella insurance depending on the size and scope of their projects.
How much does contractor insurance cost?
Contractor insurance costs vary depending on the type of work performed, business size, location, payroll, and claims history. Many small contractors pay anywhere from a few hundred to several thousand dollars per year for general liability insurance. Higher-risk trades or businesses with employees typically pay more because their exposure to claims is greater.
What does general liability insurance cover for contractors?
General liability insurance helps protect contractors if they are responsible for property damage or bodily injury to someone else. It can also help cover legal defense costs if a claim leads to a lawsuit. For example, it may respond if a contractor accidentally damages a client's property or if someone (other than an employee) is injured at a job site.
Does general liability insurance cover faulty workmanship?
General liability insurance usually does not cover the cost of fixing poor workmanship.
Do contractors need workers' compensation insurance?
It is highly recommended that contractor's with employees carry workers' compensation insurance and it is required in most states.
This coverage helps pay for medical expenses, lost wages, and rehabilitation if an employee is injured on the job.
Even contractors without employees may choose to carry it if required by a contract or to protect themselves from potential costs related to on the job injuries.
Do subcontractors need their own insurance?
Most general contractors require subcontractors to carry their own general liability and sometimes workers' compensation coverage. This helps ensure that claims related to the subcontractor's work are handled by their insurance rather than the general contractor's policy. Many contracts also require subcontractors to provide a certificate of insurance before starting work.
See also: The difference between a contractor and an employee
What is a certificate of insurance for contractors?
A certificate of insurance is a document that proves a contractor has active insurance coverage. It summarizes key details such as the types of coverage, policy limits, and effective dates.
Clients, property managers, or general contractors often ask to see a certificate of insurance before beginning work on a project.
What insurance covers contractor tools and equipment?
Tools and equipment are often covered by a policy called inland marine insurance or contractor equipment coverage. This coverage helps protect items such as power tools, machinery, and equipment if they are stolen, damaged, or lost. It can also cover tools while they are being transported between job sites.
See also:
What is Inland Marine Insurance and Why Your Business Might Need It
Do contractors need commercial auto insurance?
If a vehicle is used for business purposes, you need commercial auto insurance (if the auto is owned by the company) or Non-Owned Auto Insurance (if you are using a personal vehicle for business purposes).
Commercial auto and Non-Owned Auto coverages help protect vehicles used to transport tools, equipment, or employees and may cover liability if the driver causes an accident while working.
See Also:
How much liability insurance should a contractor carry?
Many contractors carry at least $1 million per occurrence and $2 million aggregate in general liability coverage because these limits are commonly required by construction contracts.
Larger projects or commercial clients may require higher limits or umbrella insurance to provide additional protection above the primary policy.
The Concklin Difference
Family Owned Small Business
We understand small business because we are one. Concklin Insurance Agency was started by Craig Concklin and his father, Tom Concklin in 1981. We continue to be a family owned, small business to this day.
Independent Insurance Agents
Concklin Insurance Agency has relationships with over 30 insurance carriers. This means we have options to make sure you have the coverage you need, at the best value - uninterrupted.
Value Added Services
We offer a wide range of value added services including our Client Resource Portal and comprehensive Training and Learning Solutions Portal.
Community Involvement
We understand the importance of community. Which is why we participate in fund raisers, and donate directly to local and national nonprofits.
Client Advocacy
As Trusted Insurance Advisors we are your advocate for all things insurance. We are here to talk about ways to mitigate your losses, provide insights into the insurance market and trends, and ,should a claim occur, we are in your corner every step of the way.
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