Why general liability insurance?
General liability, also known as commercial general liability, is a type of insurance that protects you and your business from lawsuits involving bodily injury and property damage. Although the risks may vary across industries, almost every small business needs a policy like this one.
General liability insurance for contractors covers anything your independent construction business may be legally responsible for, including work mistakes and negligence. Without insurance, you would have to pay out of pocket to defend yourself in court and pay for damages, but those expenses would be covered by a policy for general liability insurance for contractors.
Benefits of general liability insurance for contractors
There are a variety of reasons independent contractors don’t bother with certain insurance policies. But general liability insurance for contractors is actually a critical component to secure. Some of the benefits include:
- It protects you from the unexpected. You have the same risks as a larger construction firm, which means accidents can happen. A general liability insurance policy covers you in case of property damage or bodily injury, which means you don’t have to pay out of pocket.
- You are protected in case of a lawsuit. Whatever the cause, lawsuits do happen – and the costs can wipe out a small business. General liability insurance covers the costs of legal fees and damages associated with a lawsuit.
- Your clients will ask about it. Your clients may be more comfortable doing business with you if you hold a general liability insurance policy. If you don’t have one, your client may wind up being responsible for your wrongdoing. And if you already have one in place and don’t have to scramble for one at the last minute, a potential client knows you’re ready to start work when they are.
- It may be required. Some jurisdictions may actually require general liability insurance for contractors. Best practices suggest both you and your client hold policies.
Insurance-related risks for contractors
Of all the protective insurance policies you can get, one of the most important is general liability coverage. But general liability insurance for contractors isn’t the end all, be all of everything. You may need other coverages to protect you in other ways. General liability insurance does not cover:
- injuries sustained by your own employees
- auto accidents
- workmanship or professional mistakes
- punitive damages awards
You may need to look into other insurance policies to cover those risks. But when looking for appropriate policies for your independent contracting business, general liability insurance is an important place to begin.
