WEDNESDAY, MARCH 31, 2021
As a contractor, you may hire subcontractors to finish certain projects. Unfortunately, subcontractors may not be covered completely under your typical contractors insurance designed to protect you and your employees.
To make up for this gap, you can either extend your contractor’s insurance policy to cover subcontractors or you can require each subcontractor you hire to carry their own insurance. Adding subcontractors to your insurance usually means higher premiums, since you’d be extending the coverage.
With requiring subcontractors to have their own liability insurance, any accident or mistake they have will be handled by their insurance instead of yours. Contractors may require subcontractors to carry Owners and Contractors Protective Liability Coverage (OCP), which protects the contractor from mistakes the subcontractor may make while working for them.
What Does General Contractors Insurance Usually Cover?
Property
Property damage insurance covers the physical property of the business. This unfortunately doesn’t always cover equipment, however. While property insurance covers the work building and its assets, floater coverages help pay for equipment that is lost or damaged due to a covered peril. An equipment floater is crucial for contractors, as it can also cover items in transit. Covered perils include fire, wind damage, theft and vandalism.
Liability
Liability insurance steps in if you accidentally cause injury or property damage to someone else during the workday. There are different types of liability insurance, however. General liability insurance will only stretch so far. Professional liability insurance will step in if claims arise due to negligent acts on behalf of the business. In other words, if you or one of your full-time contractors makes a mistake that causes property damage and the client sues, professional liability will step in to help pay for damages and legal fees.
Commercial Auto
Contractors travel a great deal in the course of a workday. Work vehicles require commercial auto insurance. Personal auto insurance typically won’t cut it when it comes to work-related accidents or accidents that occur to a company-owned vehicle. Commercial auto policies contain the same coverages as personal auto policies, including comprehensive, collision, uninsured/underinsured motorist, personal injury protection and liability. If you have hired vehicles, you can also add non-owned vehicle coverage. Even personal vehicles being used for work should be covered beneath commercial auto insurance rather than a personal policy.
Workers Compensation
Nearly every business is required to have workers’ compensation in the U.S. Laws and regulations vary per state, however. This insurance helps when an employee is injured on the job.
Be sure to ask an insurance agent about coverage available under your contractors insurance policy.
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