The Most Common Type Of Construction Insurance
Contractor liability insurance is certainly the most common type of Construction insurance
. As a typical Contractors day goes by, he or she faces Contractors liability exposures the rest of us dont. An Electrician could easily cause a short that starts a fire. A Plumber or even a ground crew digging for pipes can easily rupture a pipeline that causes damage. And what about years later? That damaged pipeline could result in water leakage now, and water damage to property a year later. A faulty wiring job could take years before circuits overload and start smoldering.Because of these kinds of risks, professional Contractors are advised to get Contractor insurance to protect their business operations from unforeseeable problems that could result in Bodily Injury, Property Damage and likely litigation and lawsuits.
For nearly all states, a prerequisite in order to do business at all is to obtain a Contractor bond. A Contractors bond can be purchased for a fee, the cost ultimately depends on credit. The bond will serve as "financial assurance" that the Contractor will satisfactorily complete the job. A bond may also come into place to cover for things like unpaid subcontractors, suppliers, damage to the property or lost or stolen materials from the job site.
When the Contractors operation gets big enough to require subcontractors, General Contractor insurance may include higher Contractor liability insurance limits which could easily be $1 million, $2 million or more. At times a General Contractors insurance policy can be underwritten to custom fit the business, so a Contractor would be wise to communicate to an experienced Broker what their entire needs entail.
Because Insurance for Contractors can easily be confusing, a good purchase of protection starts with a good working relationship with an knowledgeable Broker who understands Contractors insurance and what the Contractor is trying to accomplish. Both the Contractor and the Broker share responsibility for finding the right Contractor Insurance Liability, understandable though, the Contractor often doesnt know how to effectively communicate their needs, so a good Broker knows what questions to ask, and what information is required for the purchase of insurance.
Insurance is a competitive industry, and a Broker whos well connected to several insurance carriers may prove to be very valuable. Brokers work on the customers behalf, and can shop the needs of their customers to several insurance carriers. A captive agent on the other hand has a contractual relationship with an insurance company to sell only their insurance products. Compared to Brokers, captive agents have very limited choices for getting a customer coverage.
Having an appropriate Contractors insurance policy can be very exciting for a working Contractor. It can mean peace of mind, knowing that they are covered with the right Contractor liability.
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