The work of a contractor is multi-faceted from juggling appointments, getting the crews organized, quoting jobs, and overseeing the projects. That is, in itself, time consuming, but what about coverage options available for contractors? Sounds simple enough for the typical items that need to be insured such as materials, equipment, and your business vehicles/trailers, but what about liability insurance? Liability insurance is essential to your contractor business but is it enough to protect you from losses that could happen of which you haven’t considered?
Some Typical Contractor Coverage Options You Need to Get Familiar With, but Not Limited to:
Contractors Professional Liability Insurance
You have been hired to design a project, but after completion you find out you made several errors in the design work and now you are being faced with the expenses associated with this. Depending on various factors associated with your operations, your general liability insurance may not apply.
You may need to consider contractors professional liability insurance. This type of insurance is designed to protect contractors who work as architects/design and engineers in case of errors and mistakes made pertaining to the job. Regardless of how skilled or careful you are, mistakes can and will happen, so you need to make sure you consider this type of coverage if applicable.
Certificate of Liability Insurance (COI)
A COI is requested much of the time from contractors to show proof of coverage. The form outlines effective dates of the policy, coverage limits, and policy information. Companies want to partner with those having liability insurance as to not be faced with an accident/loss only to find out there was no coverage.
Imagine a business hires a contractor for a project only to find out that contractor does not have general liability insurance. If anything happens such as damages or injuries caused by the negligence of the contractor, the business who hired him/her will be solely responsible. Typically, if a contractor has coverage, the company wants to know as it shows they are protected should something go wrong.
Contractors are used to being asked to provide the proof of liability insurance, but some businesses ask to be added as a named insured. When this happens, you may have to secure an endorsement to have the requesting entity added. Some policies will automatically include additional insureds for situations, but it is recommended you contact your local Alabama independent insurance agent for further details.
Contractors need to realize and fully comprehend what a request for being added as “an additional insured” means. Basically, the business or person asking wants to have the contractor extend his/her liability insurance protection to them, so be careful!
As a contractor, do you utilize subcontractors? When you utilize subcontractors, you are adding another element of risk to the equation. Any mistakes your subcontractors make could result in your being held liable for injuries or damages that occur because the work they do is done under your supervision and request. In this situation, you should consider being named as an additional insured on the subcontractor’s insurance policy in order to transfer the risk accordingly. Risk transfer is designed to shift the risk of loss to someone else.
Contact us TODAY!
It is always recommended you discuss your business operations/practices with us at Burkett & Associates so that you can rest assured knowing that your insurance needs are being met. If you have any further questions or concerns relating to contractors coverage options, let us know TODAY. We are here for all your Alabama business insurance needs.