You've got a lot on your shoulders when you're a general contractor. Whether you're building houses or football stadiums, you've got many subcontractors working for you, and they, in turn, have subcontractors working for them.
Each sub has a specialty, from plumbing to roofing to framing, and the list goes on. With all of this activity, you need good general contractor insurance to protect yourself against financial loss. What if a roofer falls off the roof, is injured and sues you? What if a fire destroys the building you're constructing?
Whether you're a residential or a commercial contractor, an independent insurance agent can obtain general contractor insurance quotes from multiple insurance companies so you can find a competitive rate. The agent can advise you on which general contractor insurance policies provide adequate protection for your business.
General Contractor Liability Insurance
Essential for your protection is general contractor liability insurance. It provides protection against claims of property damage or bodily injury. It pays for the costs of third-party medical care or property repair. It covers your legal defense if someone sues you and pays claims or judgments up to the limits of your policy.
On a busy construction site, the number of things that could go wrong is astronomical. Imagine you've built an apartment building and it now has leaks in all the units or it has the wrong flooring. General contractor liability insurance doesn't cover shoddy workmanship, but it does cover accidents.
Speaking of accidents, with so many workers involved in projects, many of them operating heavy equipment, climbing ladders and working on roofs and upper levels of buildings, you need general contractor liability insurance in case someone is injured.
In 2014 in the United States, there were 4,679 fatal occupational injuries of which 1 in 5 was due to construction-related deaths. Following are the most common causes of construction site injuries:
- Falls from heights (responsible for one-third fatalities)
- Falling objects, such as tools or heavy equipment, that hit workers or passersby
- Trenching accidents where dirt caves in on someone
- Electrocution due to exposure of high voltage overhead or underground power lines or faulty power tools
- Chemical injuries
- Exertion injuries
- Fire and explosion injuries
Although subcontractors have their own general contractor liability insurance, someone who sues will likely sue all parties involved. The courts hold the general contractor, as the overall manager, ultimately responsible.
You might have an indemnification agreement with a sub, but agreements aren't always honored. A sub might even skip town, leaving you to foot the bill for repairs or injuries.
Most states require this insurance so that employee on-the-job injuries are covered. You should have every subcontractor assure that they have workers' comp in place.
If a subcontractor doesn't have general contractor workers' compensation insurance, their workers become the employees of the general contractor.
You need builder's risk insurance to cover construction and everything that will be part of the structure. If a pallet of shingles sitting outside is damaged, builder's risk protects you against this financial loss.
You're covered for damage to the building that is under construction for the value of the structure at the then-current stage of construction when it's damaged.
How much is General Contractor Insurance?
General contractor insurance cost is more expensive than insurance for many other occupations. An agent can obtain general contractor insurance quotes for you from multiple companies so you can find a competitive rate.
Contractor general liability rates are higher because you're responsible for all of the subcontractors and their employees. Plus, construction is such a dangerous occupation. Liability rates vary depending on the scale and complexity of your project.
Liability rates differ, for example, if you're building a single-family home versus a skyscraper. Some factors that affect liability rates include the size and number of buildings under construction and the payroll of the subcontractors. Builder's risk insurance also varies depending on the scale of the project. Special policies are available for specific types of projects.
Commercial Contractor Insurance
Policies are different for small versus large commercial contractors. Sometimes for large projects or ones that might take more than a year to complete, a contractor will have a wrap-up and purchase commercial contractor insurance (liability and building risk) that covers all subcontractors.
Of course, this means bids for the job from subs come in a bit lower, as their commercial contractor insurance is covered. This is done for large commercial projects, such as school building or football stadium construction.
Residential Contractor Insurance
You want to get general contractor insurance quotes that are specific to residential contractors. Your residential contractor insurance varies based on the size and value of your project and the number of subcontractors.
There are policies for contractors who build one house and different policies for contractors who build a development or multiple housing units.
Your independent agent can obtain general contractor insurance quotes no matter the size or scope of your project. Quotes will come from multiple companies so you can compare coverage amounts and liability rates to ensure you get a competitive price. Let an agent do the shopping for you.
Call an independent agent today.