Whether you’re building a house from the ground up or getting major renovation work done, it’s always a good idea to have a general contractor take care of the project for you.
After all, general contractors are equipped with the much-needed expertise and experience in overseeing every single aspect of construction work, from drawing up plans to managing subcontractors.
By enlisting the help of one, your construction project is already poised for success.
One of the most important things to do before hiring a general contractor is to ensure that he or she has proper contractor insurance coverage. Here’s why.
It Helps You Avoid Liabilities
There are various types of insurance coverage for contractors, but the most common—and necessary—are general liability insurance and employer’s liability insurance.
General liability insurance covers general contractors for any third-party injury or property damage within their construction site.
So, if someone working on the roof drops a tool and hits a person or a parked car, general liability insurance will compensate the injured party or the owner of the vehicle.
If the contractor has no such coverage, the person who commissioned the work—that would be you—will likely be considered the employer and will be held accountable for the third-party injury or damage.
On the other hand, employer’s liability insurance covers a general contractor for compensation claims from workers who suffer a work-related illness or injury.
If the general contractor you hired to build or renovate your home doesn’t have employer’s liability insurance, you may be held liable to pay for the treatment, rehabilitation, and even lost wages of the injured or sick employee filing the claim.
Make sure your general contractor holds policies for both types of insurance so you won’t have to worry about liabilities for the duration of the construction process.
It Shows They Care For Their Reputation
With the right insurance coverages, a general contractor can build a reputation as someone who does not shirk from taking responsibility for any liability that may arise out of a project they’re helming, whether it’s compensation for third party injury or payment to repair or replace third party property damage.
When hiring general contractors, you need to go for those who fit the above description because they actually care enough about the work they do to invest in insurance and their credibility.
It Gives You Peace of Mind
Few things are more horrible than witnessing someone get hurt in a construction accident or, to a lesser extent, someone’s property sustaining unmistakable damage.
However, as long as you are absolutely sure that your general contractor has the proper insurance coverage, you can rest easy knowing that the poor soul involved in the accident will receive help with medical expenses and lost wages, among other things.
Knowing that you won’t have to be the one to pay for any of it should also give you plenty of peace of mind.
It Helps The Contractor Get More Business
Customers benefit greatly from working with insured general contractors, who, in turn, also enjoy the perks of having contractors insurance coverage.
One of those perks is the better position they get when drumming up business.
While many people still hire uninsured general contractors these days, many customers have already gotten smarter and choose those with proper contractors insurance coverage instead.
They know to ask the right questions—including insurance-related ones—before hiring contractors. Some even ask about specific liability insurance limits, which a general contractor must always be prepared to answer, or risk missing out on the job.
With the right insurance coverage, general contractors stand a much better chance of gaining new clients and growing their business.
Other Insurance Options For General Contractors
As mentioned above, general liability insurance and employer’s liability insurance are two of the most important coverages that a general contractor must have.
However, if a general contractor wants more protection for other scenarios that the construction business brings, there are several other options, including:
- Professional liability coverage—Covers damage from faulty workmanship or negligence, as well as all related legal expenses.
- Contractors’ pollution coverage—Protects employees facing work-related health issues caused specifically by bacteria, fungi, and other contaminants at the construction site.
- Tools and business equipment cover—Covers unforeseen loss or damage to tools and equipment.
Ways To Make Sure Your General Contractor Is Insured
Interviewing potential general contractors is part of the process, and you should never forget to ask about their insurance coverage.
It would be good if candidates say they’re insured, even better if they can show their certificate of insurance as proof.
You can also further verify the authenticity of their coverage by calling their insurance provider.
Hire Only Insured General Contractors
Customers may be hiring uninsured general contractors because they generally tend to charge lower rates than those with insurance coverage.
However, any decision to scrimp on a few pounds could become something you might regret.
No one knows when an accident will hit your construction site, and you certainly would not want to be dealing with its repercussions, knowing that your general contractor is uninsured.
When hiring a general contractor for a major construction project, keep your pool of candidates to those with insurance.