The Importance of General Liability Insurance for Contractors

As a contractor, you and your business must account for many risks and exposures as you complete projects. After all, contractors are a significant pillar of the construction industry and may work with significant perils and hazards, including working at heights, operating heavy machinery and handling harmful chemicals.

Appropriate risk management and loss control practices should be a top priority, including adequate measures for third-party losses, such as general liability insurance.

What Is General Liability Insurance for Contractors?

General liability insurance is one of the most purchased types of business insurance among U.S. companies, regardless of size or sector. These policies primarily focus on providing financial protection from the losses of other parties for which a business may be at fault. Purchasing and maintaining adequate general liability insurance can make all the difference in responding to many common incidents, such as the following:

• Third-party bodily injuries, such as those sustained by guests, passersby or clients on or near a job site
• Third-party property damage, such as that involving a neighboring lot’s structures or a passing vehicle
• Third-party personal and advertising injury, such as reputational harm or copyright infringement inflicted on another party

Why Do Contractors Need General Liability Insurance?

Regardless of a contractor’s commitment to safety or the experience levels of its employees, accidents, errors and other incidents may inevitably occur. Construction sites and contractors’ tasks are rife with various risks and perils, and even a slight miscalculation could lead to costly financial repercussions.

Consider the following real-life examples:

• As a contractor, you may be working on an active job site with other things going on around you. If a developer chooses to welcome guests, such as investors or the media, to the site and they are injured as a result of your negligence or actions, your general liability insurance may help pay for resulting medical bills and financial losses.
• While conducting tasks, many contractors and construction sites may use or be in the presence of flammable materials and ignition sources. Should you or one of your employees accidentally start a fire that spreads to a neighboring building, general liability coverage may render aid for resulting damages.
• Contractors must often bid against other businesses for jobs, and your company cannot afford to make false claims about why you may be best suited for a project amid this competitive environment. Should a competing contractor accuse you of slander or libel, general liability insurance may play a key role in limiting out-of-pocket losses and expenses for legal representation, settlements and judgments.

We’re Here to Help

At Axcess Insurance, we understand the many perils and risks of being a contractor and will work with you to ensure you have adequate general liability coverage to protect your interests. Contact us today to get started.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.