General Liability

The Basics Of A Contractor's General Liability

A general Contractor takes many risks when working without Contractor's General Liability Insurance. Many people won't take the risk on hiring an uninsured Contractor to do their work. A Contractor's General Liability include any accidents that happen during the work, any contract liability that may result from a law suit, and products that default or cause harm  as well as any incident that costs money, pain or time. A Contractor is responsible for all of these. With Contractor's General Liability Insurance, these incidents are handled by the insurance company, their attorneys and their money. Contractors that give a customer extremely low estimates compared to others are typically a red flag for those that do not have Contractor's General Liability Insurance. Be sure to ask for this proof and include in the contract that your Contractor swears that they have Contractor's General Liability Insurance.

A Contractor's General Liability needs to be insured but it's not cheap. Typically insurance will cover hundreds of thousands  of dollars to a few million dollars in liability. This means if someone is injured at your Contractor's expense and the the law suit and medical bills are in the hundreds of thousands, your Contractor's General Liability Insurance will cover this burden. The more coverages you have the higher your rate will be but that shouldn't deter a Contractor from protecting himself accordingly.

As a customer of a Contractor you should know that if your Contractor doesn't have Contractor's General Liability Insurance and you injure yourself because of something your Contractor did and your medical bills and loss of pay are in the hundreds of thousands of dollars, you can still sue, but if the Contractor doesn't have the money or the assets to collect, you won't see but a fraction of that money. This is why you want to be sure your Contractor has Contractor's General Liability Insurance even if it means you have to hire the Contractor that gave you the higher estimate.

Another thing to be sure of is that each of the people working for your Contractor on your project are covered by the Contractor's General Liability Insurance. These insurance carriers may try to avoid the higher cost of having additional men on their team so they don't list them as a part of the party who will be working under them. If these people cause you injury, fail to perform, violate any of the contract, you cannot collect on the Contractor's General Liability Insurance because they are not a member. By law it is one of the many requirements to be sure that each member of the work force is listed, but the insurance companies cannot effectively monitor each Contractor and make sure that they have reported accurately. 

You and your contractor should discuss each of these elements and define any additional criteria that needs to be met. You both have serious obligations under any contract and if one party breeches or causes reason for a law suit, you want to be sure that you are covered for you losses.