Tag Archives: Do you want to take out a contractor’s liability insurance

When Do You Need A Contractor General Liability?

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A contractor general liability is useful for different construction businesses. But have you ever wondered when you should get this liability? This article explains it all.

Contractors in various specialties, such as masonry, carpentry, fencing, concrete, landscaping, flooring, HVAC, and electrical, are exposed to numerous general liability issues when they’re working on-site.

If employees and business owners don’t actively address contractor general liability problems, they may result in visitor or customer injuries, stolen or damaged equipment, and property damage.

Moreover, losses of any type can cause damage to your reputation with existing and potential customers and impact your business negatively when it comes to finances.

This article addresses two areas of contractor general liability, the first one being job site premises and operations, and the second one being products and completed operations. 

These lists include suggestions to help you manage hazards while working on a job site and prevent losses from liabilities. But know that these lists aren’t comprehensive and don’t include all potential hazards, so you’ll need to be diligent in securing all work sites.

Contractor General Liability Job Site Premises and Operations

The most common contractor general liability losses while working on a job site are slips, falls, trips, bodily injury, and property damage. So this list will help you to think about which of the following items can be applied to your next worksite.

  • Workers are skilled, experienced, and licensed (if applicable)
  • Newer employees are closely monitored by experienced workers
  • Good housekeeping is maintained throughout the premises at all times
  • Floors, hallways, and aisles are kept clear of debris
  • Spills are cleaned up immediately
  • Floors, sidewalks, and parking lots are well-lit, in good condition, and don’t have cracks or unanchored coverings
  • Stairways are in good condition, have proper handrails, and are well-lit
  • Tools and materials are neatly arranged and do not obstruct walkways
  • Tools are removed from the site at the end of each day and any tools left overnight are stored securely in a locked space
  • Equipment and materials left overnight are stored appropriately
  • Job sites left unattended by workers are properly secured and free from hazards
  • Exits from the premises are clearly marked and unobstructed
  • Access to the premises is limited to necessary personnel while operations are performed
  • Visitors or customers permitted to enter work areas are accompanied by a qualified employee at all times and are required to wear personal protective equipment when needed
  • Customers are prohibited from touching or holding tools or equipment, climbing ladders, and assisting in work performed by employees
  • Visitors and customers are informed of potential hazards and are aware that kids and pets are prohibited from entering the work site
  • Noise from machinery and tools is as limited as possible
  • Worksites are inspected regularly to identify and control hazards

Contractor General Liability Products and Completed Operations

Contractor general liability losses caused by products and completed operations can include anything from property damage to bodily injury. Common causes are failure to meet specifications or building codes, use of substandard materials, poor workmanship, maintenance, incorrect installation, repair operations, improper design, and faulty equipment. 

This list demonstrates actions that can reduce the potential for liability issues.

  • Component and raw material suppliers must meet strict quality standards
  • Incoming components, materials, and equipment are thoroughly inspected, and items that don’t meet the standards are refused
  • Shipping and receiving records are maintained so that any defective materials can be traced back to their original suppliers
  • Quality control measures are in place to make sure all work meets minimum levels of acceptability and is done competently
  • If guarantees or warranties are offered to customers, they’re in writing before the job starts
  • Local building regulations, codes, and ordinances are investigated before any installation procedures commence
  • Equipment installations follow all of the manufacturer’s instructions
  • Workers performing maintenance operations follow a procedural checklist to ensure no steps are missed
  • The business has methods set for inspecting work when it is completed
  • Debris, raw materials, tools, and other equipment are removed from the job site when work is completed, so nothing is left behind
  • Detailed customer records are kept that include all work completed along with maintenance and service intervals (if applicable)
  • Customers are provided information regarding the proper operation and maintenance of installed materials, equipment, and such.

Summing Up Contractor General Liability 

As a business owner, it’s best to have a contractor general liability for as many of these aforementioned scenarios as possible. Because you never know when a situation that warrants this liability arises.

What is A Contractor’s Liability Insurance?

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A contractor’s liability insurance is a safety net for people who work in construction. It is a specialized form of insurance against different risks and liabilities that contractors face, like property damage, bodily injury, and even legal fees arising from lawsuits. This article explains it in detail.

What is This Insurance About and What Does it Do?

A contractor’s liability insurance (CLI) covers building professionals and contractors in case of construction errors. It is purchased by contractors who design and build construction projects. 

It covers both mistakes made by the contractor and third parties hired by the contractor. These third parties may be needed in case of specialized work, like drywalling, electric work, plumbing, and such.

Not all contractors provide all kinds of construction-related services. Usually, only larger contractors offer them in-house. Yet they’re also exposed to more risks, which this insurance protects them from. 

Why is A Contractor’s Liability Insurance Needed?

It covers risks that aren’t covered by a General Commercial Liability insurance (CGL). A CGL doesn’t include professional liability exclusions, which is why a contractor’s liability insurance can come in handy. 

What is Covered Under A CLI?

Many construction-related activities can be included in a list that’s in the policy documentation. Or it may be tailored to the needs of the contractor purchasing it. Some policies include a list of undertakings that aren’t a part of coverage. 

Contractors can buy a standing contractor’s liability insurance that covers everything that the contractor does. They may also choose to purchase a policy that covers particular projects with detailed time frames.

CLI vs Builders’ Risk Coverage

Both of these types of insurance cover a similar set of conditions, entities involved, and types of loss in a building project. Although, the CLU is usually taken out by the contractor. While builders’ risk is taken out by the project’s owner.

Also, the CLI can be taken out for building improvement projects, yet it may not be available for a new project without any existing structure. Simultaneously, builders’ risk coverage can secure projects that don’t have an existing structure. 

Summing Up Contractor’s Liability Insurance

Contractors liability insurance provides coverage for both third-party hires and contractors, like designers, architects, and engineers. It helps in case of errors and mistakes made on the job, and other losses incurred during a building project.