In every business and endeavour in life, there is always the potential of risks occurring. There however is a higher chance of it happening in some professions than in others. One of these is in the construction business.
There can be different levels of risk involved in this line of business as workers have to climb heights, work with different tools, and so on. There is also the possibility that the construction may not go according to plan, something may go wrong with the project or even someone other than workers or those involved in the project may get hurt by virtue of the construction.
To forestall or take care of all these, contractors are expected to observe safety measures to keep their workers, the project, as well as third parties, protected. Sometimes though, regardless of how much you try or the precautions you put in place, some things just happen; things you should have cover for.
What is General Liability Insurance?
For contractors in the construction business, general liability insurance is one of the most important covers that can get. It provides cover for claims resulting from injuries or damages to property that belongs to other people. That is situations in which a third party who is not related to the project is injured or impacted negatively by it.
This kind of insurance covers any medical treatment and legal costs as well as payouts a contractor is responsible for if found liable. Unlike most policies that pay the holder, this does not, but rather pays the affected third party. General liability does not, however, cover contractual liabilities, intentional damages, or criminal prosecutions.
The aim of a general liability policy is to safeguard your business in the event that there is any mishap. You do not have to pay out of your company resources as this can practically ruin your business. It is most times a part of the requirements when bidding to get a project.
Also, before some companies work with you may be as a subcontractor, it is part of their requirements that you make them an “additional insured”. An additional insured is a status in general liability whereby other individuals or businesses are added to a policy so they can be protected under the name of the insured. This will grant them the right to file a claim in an event that an accident happens and they are sued while working for or with the insured.
General liability can come in two types: a claims-made policy or an occurrence policy. An occurrence policy means that what the contractor is being sued for occurred at a time when the policy was in force. It does not matter if the policy has now elapsed, the fact that the incident occurred during the period when the policy was active makes it a valid claim. A claims-only covers the claims irrespective of the timing of the incident.
What Does a Liability Policy Cover?
Although general liability insurance is often considered a kind of comprehensive insurance, it does not necessarily cover all risks that a contractor or their business might encounter. You can find below what this type of insurance can be used for. They include:
- Property damage. This covers the property of a third party not involved in the project and not one that belongs to the contractor or their client.
- Bodily injury. This does not cover injury to an employee of the business.
Personal and advertising injury. This deals with injuries that are non-physical such as emotional trauma, libel, infringements, etc.
Products and completed operations. This is usually for damages that occur when the project is already completed though the policy must still be active for you to be able to lay any claim.
When buying a general liability policy, you need to determine the type you want. Remember that you can choose between claims-made or an occurrence-based policy. If in the event that a claim exceeds the limit of the policy, you can always buy excess liability coverage to take care of the excess. You can check to learn more about this policy and how to make a purchase.
As much as you can take precautions when embarking on a project, there is always the risk that accidents can occur. To act as a sort of shock absorb when an incident occurs, you need to get an insurance cover. General liability is an important one to get because it comes with a lot of benefits that you can take advantage of to safeguard your business.