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Construction Liability Insurance: The Do’s and Don’ts You Need to Know For Your Business

Construction can be a dangerous and aggressive business. Contractors and builders are often in high-risk situations and must have construction liability insurance.

Whether a visitor is hurt on-site or a worker is hurt or held liable for mishap or damage, you need to be protected. This type of liability insurance offers coverage for injury, accidents, and workplace mistakes.

As a busy professional, you have more pressing concerns than worrying about what-ifs. So when the unexpected happens, this construction liability insurance coverage helps to make sure your construction or contracting business is protected.

Let’s take a look.

Protecting Your Assets

Although you hope it never happens, a third party could allege that your business is responsible for property damage or even bodily harm. Without the appropriate liability insurance coverage, you could be held responsible for those damages.

You don’t want to be left in this situation. This could do considerable damage to your business and your income.

Instead, you want to be prepared.

When Things Go Wrong

Although you do your best to follow safety regulations at all times, things will inevitably go wrong. Accidents happen even to the most responsible business owners.

Whether the injury occurs to a client or loyal employee, if the injury is serious, you could be put in a financial bind.

Having construction liability insurance lets you deal with these situations and expenses while protecting your business from financial ruin.

Protecting Your Employees

When accidents happen, a claim can be brought against your business or against individual employees. Having good liability coverage can protect your workers when the unexpected happens.

This can offer you and your employees peace of mind knowing that if mistakes are made or an accident occurs, it will be covered.

Bodily Injury

Any labor-intensive business deals with risks on a daily basis. You may do everything by-the-book, but an accident can still occur. This risk compounds when visitors or untrained workers are on site.

With construction liability insurance, your business is protected. In addition, this coverage can protect you from legal costs if your business is accused of damaging someone’s property.

Completed Products

A good liability policy will help pay claims in regard to completed services or products your business has produced. For instance, if your business had installed cabinetry or shelving that causes the homeowner injury, you could be held liable.

That’s not a situation any business owner would want. With appropriate liability coverage, legal bills and damages could be covered depending on your policy limits.

Faulty Workmanship

Faulty workmanship coverage is often covered, but this depends on your particular construction liability coverage. This is often called Contractors Errors and Omissions Coverage.

Depending on the business you run, you might need this type of coverage. It protects you from claims of negligent work.

If you go over budget or fail to complete a project in the agreed upon time, you could be held responsible for those additional costs. If you feel you need this type of coverage, it’s important to talk to your insurance agent.

Advertising Injury

All successful businesses must advertise, but the claims you state in your ads are important to live up to. But everything doesn’t always go as planned, as you know.

Having a liability policy covering slander, libel, copyright issues, and privacy is a smart idea if you don’t have professionals handling the job.

Advertising mistakes can be easily made when you are busy, advertise via social media, or haven’t done your research on compliance research.

Immediate medical Expenses

If a patron is injured on your business property, you need immediate medical expense coverage as part of your construction liability insurance. No matter how strictly you follow safety guidelines, an accident can occur at any moment.

You want to address any injury right away. It’s much better to have insurance protection that provides immediate coverage for medical expenses than to deal with a potential lawsuit down the road.

Do I Really Need Construction Liability Insurance

It’s possible that clients you work with may require you to have this coverage before working with you. This offers them peace of mind knowing if your business is negligent in some way or causes physical harm, they are protected financially.

If you offer extensive in-house services, you may need additional Faulty Workmanship coverage. This helps protect you in case of a lawsuit due to mistakes in design work.

This liability coverage also protects your clients from monetary loss if your workmanship is sub-par.

If you’re hired as a contractor to be part of a large project, you might be expected to have your own liability coverage. This may vary from one project to the next.

Whatever questions you may have, you can get advice from a reputable agency like Poms & Associates construction liability insurance. They will help you to get the best coverage possible for your particular business.

The Costs

The costs of construction liability insurance can vary depending on the perceived risks associated with your business. Contractors for highly specialized trades and commercial contractors are considered to be at high risk for damages.

The need for liability insurance is measured against the money executed by the contractor. As a general rule, it’s recommended to have coverage at least two to three times your construction costs.

The Limitations

This type of insurance does have limitations. Limits are set per occurrence and according to aggregated values. There are limits for fire damage and for medical expense coverage not covered by workman’s compensation as well.

Although there are limitations on what liability insurance will cover, the alternative is no coverage at all. That’s too big of a risk to take with your business and livelihood.

Being Prepared

In business as in life, the unexpected will inevitably happen. You don’t want to be left wondering what to do when an unfortunate incident occurs.

No matter what level of construction your business is in, having adequate insurance coverage is a must. Being prepared is always your best best.

For more helpful information, check out our blog.

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