The importance of insurance in the construction industry cannot be stressed enough. The construction industry focuses on the tasks of contractors, subcontractors and workers that come together to provide the final product to a client. That product can include the construction of a new building structure, repairing the current structure, or creating a new roadway or walkway for pedestrian or vehicle travel. With so many pieces in play at any given time during a project, there is the potential for something to go wrong.
A worker carrying a stack of plywood can accidentally hit a window with the wood, causing the glass to shatter. Another worker driving a crane may incorrectly remove a row of trees as a result of misunderstanding directions. There is also the potential for personal injury to occur as workers handle heavy equipment and tools.
As the contractor on the job site, you are financially responsible for the damage done to the client’s property or the construction site. For that reason, you need to have contractor liability insurance in place before setting foot on a new project job site.
What is Contractor’s Liability Insurance Protection
Contractor’s liability insurance protects you against all instances of accidental injury to a construction worker on your team or the client’s personal property. As a construction contractor, you may encounter situations where the client is not happy with the final product that you provide. If you are unable to resolve the grievances on the job site, the client may file a lawsuit against you. The liability insurance will help you fight back against these claims.
You also receive an important barrier of protection for your company as a whole, which covers yourself, your employees, and any equipment or other assets that you have on a job site during a project. The liability insurance will cover claims of theft when a client accuses one of your employees of stealing their personal property while working on the job site. Inaccurate reports of theft are a common occurrence on construction site properties.
How Construction Liability Provides Coverage
The primary objective of construction liability insurance is to bring a level of safety to your job sites. You are able to focus on the task at hand without having to worry about the repercussions of something going wrong. Construction site insurance gives you coverage for claims that include the following areas of construction work.
- Injury Claims
These types of claims focus on your financial responsibility for expenses that arise when a worker sustains an injury on the job site. You receive additional coverage when facing funeral costs and any costs that the court finds you responsible to pay. It excludes any workers compensation claims.
- Damage Claims
Damage claims arise when you, an employee or a piece of construction equipment cause damage to a client’s property. You also receive coverage from the financial responsibility of having to pay the relocation costs when your actions cause the client to relocate to a secondary property, such as a hotel. This occurs when there is damage to the client’s property that make it uninhabitable.
- Product Claims
There are times during a construction project when you install a piece of equipment that remains a permanent part of the client’s property. After the project is complete, the product may malfunction, causing personal injury to the client. It may also damage the client’s property, making it difficult for the client to continue living or working there.
- Copyright Claims
You may invent a product that makes the work you do on a construction job site easier to complete. However, when that product goes public, another member of your industry may file a claim stating that you stole the idea. As a result, you now face an issue of copyright infringement.
An unhappy client can easily file any one of these claims against you or your company. The simple act of filing a claim does not require actual evidence to back up the claim. A client may hold you responsible for damage that is out of your control. These include weather events that may cause damage to a job site, or acts of vandalism or theft. For each of these claim types, your construction liability insurance company works on your behalf to handle the financial repercussions of these events.
The Risk of Not Having Liability Insurance
These claims have the potential to take a significant amount of time to resolve. The relevant costs quickly add up as well. Your lack of insurance makes you solely responsible for these costs. You must pay for each cost that applies in these cases, as well as any financial judgement, for which a court of law finds you responsible. Each out-of-pocket payment takes more money away from your business. Therefore, not having construction liability insurance in place may result in you closing down your business. This makes insurance for construction workers, and insurance for construction companies a must have.
Contact us today to speak with a friendly and knowledgeable (a real voice, not automated) staff member who will help you gain the protection that ensures you have coverage in place when the unexpected happens!