Are you a part of the thriving construction industry in the US? As a contractor, your work is at the heart of this dynamic and ever-evolving field. The possibilities of untoward incidents are always there, keeping you anxious while continuing your business.
You understand that success in the construction business involves more than just the physical aspects of the job. It’s also about protecting your business from unforeseen risks and liabilities. That’s where general liability insurance becomes relevant.
As of 2023, there are over 3.9 million construction businesses in the US, which marks a significant 3.4% increase from 2022. The figures are indicative of the fact that the competition is fierce. In this highly competitive landscape, having the right tools and a skilled workforce is crucial. But there’s another essential aspect you should have on your radar: general liability insurance.
Are you curious about how this insurance functions or what features you should consider when purchasing this type of insurance? Don’t worry! This blog aims to answer these questions, thereby helping you make an informed decision.
Table of Contents
Coverage
General liability insurance is designed to provide protection when things do not go as expected. It’s that safety net that every contractor needs to ensure their business stays afloat. This insurance typically provides coverage for three main types of liabilities, making sure you’re protected in various scenarios.
Bodily Injury
This coverage steps in if someone gets hurt on your worksite or as a result of your work. Be it a worker or a passerby, it covers medical bills and potential legal claims stemming from the injury.
Construction workers are susceptible to various types of injuries, which can result in both fatal and non-fatal health consequences. What’s even more distressing is that these injuries have been on the rise over the years.
As per the Bureau of Labor Statistics (BLS), the construction industry experienced a worrisome 7.2% rise in fatalities caused by falls, slips, and trips in 2021. This figure climbed from 345 fatalities in 2020 to 370 in 2021. This alarming increase underscores the significance of having comprehensive coverage, as provided by general liability insurance.
Property Damage
Imagine a scenario where your construction work inadvertently causes damage to your client’s property or other third-party property. This insurance helps by covering the expenses associated with repairs or replacements.
Personal Injury
This insurance also covers non-physical injuries like defamation, copyright infringement, or slander that may occur during your business operations. In today’s digital age, this aspect is increasingly important.
Limits and Deductibles
Limits establish the highest sum that your insurance provider will disburse for eligible claims. It’s crucial to choose these limits wisely, aligning them with the potential risks your construction business may face. Setting your limits too low could leave you exposed to financial risks, while excessively high limits might lead to unnecessary expenses.
The deductibles represent the upfront costs that you are responsible for covering before the insurance policy begins to provide coverage. Higher deductibles can lead to lower premium costs but may mean more significant initial expenses in the event of a claim.
On the other hand, opting for lower deductibles could result in higher premiums but less immediate financial strain in the event of an incident. Striking the right balance between limits and deductibles is crucial for tailoring your General Liability Insurance to your specific needs.
However, without a reliable and experienced provider, you can’t make sense of these things on your own. With many reliable resources available online, you should choose one that goes the extra mile to understand your business needs. To learn more, you can check a reliable insurance provider’s website and book a demo.
Provides Additional Coverage
Beyond the fundamental components, general liability insurance offers options for additional coverage for the unique risks you may encounter in the construction industry.
One such option is coverage for completed operations, which addresses claims that arise after your project is finished. This safeguard is crucial because it shields you from the entire financial burden, even after your work is done and issues arise.
If you hire subcontractors for specific tasks, this coverage can protect you from liabilities arising from their work. This, in turn, helps you avoid legal entanglements and financial strains. It’s an essential feature, especially when collaborating with multiple parties on a project.
Along with injuries and property damage, General Liability also covers deaths. While this is a grim aspect to consider, it underscores the gravity of potential risks in construction.
In the United States, the construction industry reported 1,015 fatalities due to work-related incidents in 2021, as per Statista. This statistic underscores the importance of having comprehensive insurance coverage that provides for the affected families in such tragic situations.
Acts as a Protective Shield Against Legal Liabilities
Having this coverage is akin to having a legal team readily available for assistance during critical moments. In the event of a covered claim or lawsuit, your insurance company will step in to cover the costs associated with your legal defense.
Such expenses may encompass lawyer fees, court costs, and other financial outlays associated with legal matters. This support can be invaluable, as legal battles can be protracted and expensive, potentially draining your financial resources.
Moreover, general liability insurance offers legal protection, even in cases where the accusations against you lack merit. This means you can rest assured that you won’t be financially burdened with defending your business’s reputation in a legal setting. Having this legal protection in place can provide peace of mind and allow you to focus on your construction projects.
According to Commodore Insurance Services, when selecting insurance providers, you must consider certain aspects. One of the key aspects should be the providers’ ability to customize various programs to align with their client’s needs and budgets.
Summing Up
In the dynamic world of construction, knowledge is your greatest asset. These key features are important for every contractor to thrive in this industry. Whether you’re a seasoned pro or just starting, this knowledge empowers you to build a strong foundation for your business success. So, go ahead, secure your projects, protect your reputation, and ensure the longevity of your construction business with the right insurance.