When running a construction business or working as an independent contractor in the field, a person will want to buy a decent contractor insurance policy covering him or her in case of serious errors or injuries. While true, when choosing contractor insurance, one must think of the long-term implications. With this in mind, here are the legal implications associated with contractor insurance.
Who needs it: When working as a contractor, people will often skip this expensive bill as a way to save money. The thought behind this is simple as plenty of contractors think their work doesn’t merit insurance. However, whether you work as a general contractor, a painter, an electrician or in any other construction field, you will need insurance. Otherwise, one false move can cost you tens of thousands of dollars.
May need more: First and foremost, when you want to find a job, the site may require high levels of insurance. This is true when you work on a government building or complete tasks for a corporation. To understand how much you need to carry, ask the owner of the property what they require. While this is a pain, it will save you money in the long run if you buy the right levels of insurance. However, if you want to avoid this altogether, you need to purchase enough insurance to complete any job. Then, you can confidently bid for any work and not worry about needing to increase your insurance coverage.
You may not have the best coverage: While plenty of professionals will rush out and buy a policy, they won’t always buy the right one. Sadly, when this happens, you are vulnerable if errors occur. Think about it, if you only buy general liability insurance, you will not protect your commercial vehicle or your employees. No, instead, to understand what you need, it’s best to chat with an insurance agent who can help you determine your best course of action. Remember, when buying insurance, it’s not enough to sign up for a random service and write a check; you need to choose the policies covering your unique situation.
Workers’ compensation: As mentioned, if you hire contractors or employees, you will need worker’s compensation insurance. While rules vary from state-to-state, you cannot justify ignoring this fact. If you do, not only will you struggle to land jobs where people require workers’ comp insurance, but you will lose out on government contracts where people will verify that you carry enough insurance to protect workers on the site. If not, you will hurt your reputation and end up missing out on future jobs.
Don’t miss one payment: Finally, if you buy the right policy and carry proof of insurance, you can land a new job. While true, you will hurt your cause if you miss a payment, as providers will suspend your coverage. To avoid this, you can either pay your bills automatically or in full from the beginning. Otherwise, with one missed payment, you will hurt your reputation and lose your insurance coverage. If a person discovers this, he or she may kick you off the job site.
With these five legal implications to understand, you can find the best coverage for your construction firm. If not, you will struggle to stay ahead if you commit an error.