As a contractor, you need general liability insurance to protect your personal and professional interests. One accident on the job can turn into a lawsuit that ties up all your funds. However, general liability insurance protects your exposure, and many clients won't hire you unless you can show proof of insurance. Learn about the kind of general liability needed by contractors and the legal requirements to consider.
What Is General Liability Insurance For Contractors?
As a contractor, general liability insurance might provide the coverage you need. By contrast, a full BOP contains a lot more coverage for a much higher premium. For example, if you don't own commercial property, you may not need property insurance to cover operating expenses in the event of a covered peril. However, your job still carries a liability risk.
Sit down with your agent to map out the risks inherent in your line of work. From there, you can decide if general liability insurance covers most of your risk. Some contractors also purchase blanket insurance, which extends your existing insurance as required by an employer.
The Cost Of General Liability Insurance
The average cost for general liability insurance runs about $700 a year. That's less than $60 a month, with many small businesses paying less than that. The real question, then, is whether you can afford to forego this coverage.
Get General Liability As Part Of A BOP
A business owner’s policy, or BOP, is a commercial policy created with small and midsize businesses in mind. You can bundle your general liability, property insurance and other coverage for better rates. It's worthwhile to talk to other contractors and your insurance agent regarding the types of insurance available with a BOP. Compare the bundled and a la carte pricing to determine your savings and make a sound financial decision.
If you need to cover personal property or commercial property, such as a storage facility or garage, a BOP may be your best option.
Is General Liability A Legally Requirement?
General liability isn't a legal requirement. However, if you don't have it, many clients won't hire you for jobs. You could also end up paying claims against you out-of-pocket, including the legal fee charged by an experienced attorney. It only takes a moment to lose everything. A client could trip over a loose rug or get hurt on a construction site. Without general liability insurance, you may have to pay for their medical bills plus your own legal fees. Making general liability insurance a priority helps you protect your business.