As a contractor, you have the task of walking into a project, doing some specific work, and then leaving. Plumbers, electricians, drywall contractors and others often provide very specific services backed by specific skills. They are quite valuable. Yet, most general contractors and larger firms will not allow you to begin working if you don’t carry proper general liability insurance. The reasoning behind this is very simple. Do you have the proper coverage in place?
The goal of general liability insurance is to minimize financial loss.
Consider the general contractor’s job, for example. If you work with a builder, he or she wants to ensure each sub-contractor on the project has proper liability insurance. If you do something wrong on the job, your general liability insurance is there to help protect you. It covers the damage for the end client. If the client gets hurt, coverage might help you pay for their injury costs.
If you do not have this coverage, though, it might fall on the builder’s shoulders to pay for it. That makes it very costly. This is why most companies require you to carry insurance.
What Do You Need?
The details of these requirements vary from one area to the next.
Most of the time, general liability insurance should provide between $500,000 and $1,000,000 worth of protection. You might even need higher limits. It depends on the size of your business. It also depends on the type of work you do and the risks involved. Having too much is rarely a problem. Having too little means your company remains exposed.
Also, determine any other requirements necessary. If you work on government projects, you may need to have a bond in place as well. Bonding is important because it helps the agency to know that what you do will be exactly as you said it would be. It provides a higher level of protection over the final project. Many larger companies require this as well.
How to Update Your Coverage
As a business owner, it does not have to be hard for you to get your general liability insurance up to date. Contact your agent. Discuss the types of work you plan to do. Discuss the requirements of these companies. Then, up your policy to match the requirements they have.
Most often, a letter from your business insurance agent can help give your customers and clients the confidence they need to work with you.
For more information on general liability insurance contact us today.