Understanding Contractor Liability Insurance

All contractors are responsible for ensuring that they deliver first-class service to their clients. This includes understanding the potential risks involved in their work and taking the necessary steps to mitigate them. Part of this is ensuring that they have the right insurance in place, including contractor liability insurance.

The unimaginable and unexpected can happen in the conduct of your business. Say, when a client trips over your toolbox and bumps their head, you need insurance to cover the cost of any medical bills they incur or potential settlement claims they file for bodily injury.

In this article, we’ll delve into understanding contractor liability insurance.

What is Contractor Liability Insurance?

Contractor liability insurance is a type of insurance that provides protection to businesses and individuals who work as contractors, in the event that they are sued for damages arising from their work.

This type of insurance can protect against claims of negligence, bodily injury, property damage, and more. It can also provide coverage for legal expenses incurred in defending against a lawsuit.

There are two main types of contractor liability insurance:

• General Liability Insurance
• Professional Liability Insurance

General liability insurance provides protection against claims of negligence. On the other hand, professional liability insurance protects against claims of errors or omissions in your work.

Who Needs Contractor Liability Insurance?

Knowing who needs the policy is the next step to understanding contractor liability insurance. Most states require that contractors have some form of liability insurance. In some cases, the state may even specify the minimum amount of coverage that a contractor must have.

If you’re doing work for a client, they may also require you to carry a certain amount of liability insurance. In fact, many clients will not do business with a contractor who doesn’t have insurance.

In general, any contractor, construction business, or tradespeople needs this coverage, some examples include:

• General contractors like masonry, drywall, excavation concrete
• Residential home services like plumbers, roofers, carpenters, welders, electricians, etc.
• Lawn care, landscapers, and hardscape contractors
• Appliance repair technicians and tech experts
• Tree service businesses, snow and ice removal contractors, and debris removal businesses

How to Create a Contractor Safety Program

In order to create and maintain a safe work environment for your employees’ customers, and the general public, you need to develop and implement a safety program. Here are some key components of an effective contractor safety program:

1. Identify your needs

Before you can develop a safety program, you need to first assess what your specific needs are. This covers answering questions like:

• What type of work will your employees be doing?
• What are the potential hazards associated with this work?
• What are the insurance and legal risks of the company?

Once you have a good understanding of the risks involved, you can begin to develop specific safety procedures to mitigate those risks.

2. Set safety goals.

After you have identified the risks involved in your company’s work, you need to set specific safety goals. These goals should be realistic and achievable, and they should be based on the specific risks involved in your company’s work.

Some examples of safety goals include:

• Reducing the number of accidents by X percent
• Reducing the number of lost work days due to injury by X percent
• Improving safety training for all employees

3. Create a policy.

After you have set your safety goals, you need to create a written safety policy that outlines your company’s commitment to safety. This policy should be reviewed and updated on a regular basis, and all employees should be aware of and understand the policy.

The safety policy should cover:

• A statement of your company’s commitment to safety
• Clear guidelines and procedures for employees to follow
• The consequences of not following safety procedures
• Regular safety audits and reviews
• A process for employees to report safety concerns
• Safety training for all employees

4. Prepare a budget.

After you have set your safety goals and created your safety policy, you need to prepare a budget for your contractor liability insurance. This budget should include the cost of insurance, as well as the cost of any safety equipment or training that you will need to implement your safety policy.

5. Decide who will be in charge of the program.

You need to decide who will be responsible for implementing and maintaining your safety policy. This person should have a good understanding of safety procedures and the ability to train other employees on these procedures.

6. Ensure that the program’s daily duties are performed.

The program will include accountability, disciplinary standards, safety training, and education for all employees. Your duty is to ensure all of these things are conducted and everyone is compliant with all the provisions and prohibitions within the policy.

7. Evaluate the effectiveness of programs regularly.

A contractor safety program is only as good as its effectiveness in mitigating risks, protecting your clients, and preserving the bottom line. To this end, regular evaluation and adjustments must be made to ensure that everything is in place.

Contractor safety programs are essential to protecting your business. They’re your first line of defense against problems you may encounter when carrying out your duties. However, when that fails, you need contractor liability insurance to cover all costs associated with the mishap.

To understand the best contractor liability insurance options for your business please reach out. One of our Experts at Northeast – MetroWest Insurance Agency will gladly help you. Click here to find out more about Contractor Liability Insurance.