Contractors General Liability Insurance: A Brief Introduction

Contractors General Liability Insurance is a type of insurance policy. This insurance mainly used as a safeguard against liability caused by injury and damages. The need for this type of insurance is high enough to where it is required by law in most states. Consideration for the type of work performed will determine the type of contractors liability insurance needed for a job. Other considerations also must be taken into account when purchasing this type of policy. Here is a brief explanation of what contractors general liability insurance is and the considerations which need to be addressed when buying a policy of this type.

Contractors General Liability Insurance is a liability insurance policy which is used specifically for coverage in the construction and building trades. This insurance covers a range of issues from accidents to negligence and oversight. Contractors General Liability Insurance is mainly used by contractors who do a variety of work within a specific type of construction or remodeling such as home builders or road construction.

The function of Contractors General Liability Insurance is to guard the operators and owners of companies from any claims which could include the following:

* Liability from accidents

* Contractual liability

* Products made by the insured

* Liability caused by a worker employed by the contractor

Many times a contractor can not set foot onto a project until the certificate of insurance is sent by the agent. Because of this fact, a contractor can be found in breach of their contract if they are unable to start the job on time because the certificate is not available.

For most projects, the contractors will be required to provide an original certificate of insurance showing they have Contractors General Liability Insurance from an agent. Some agents can supply this certificate quickly while others are much slower.

There are four types of general liability insurance for contractors. Each covers a different aspect of business need.

* Primary General Liability - this policy covers a wide range of contractors including road builders, pipeline and power construction and residential homebuilders

* Lead Umbrella Liability - this policy covers excess liability for the lead contractor who hires on subcontractors or other professionals for a project

* Owners Interest - this type of policy provides the primary general liability for the owner of any land where the construction project is being performed.

* Primary General Liability - this policy type is a layered coverage for both project-specific and rolling coverage where the general contractor has multiple projects in operation at any single time

Some considerations which contractors should take into account when purchasing Contractors General Liability Insurance include:

* The liability selected determines the cost of the insurance. This cost also factors in the type of work undertaken, gross income and payroll and complexity of the project.

* Similar to auto insurance, this insurance requires a down payment followed by installments.

*The General Contractor needs to be sure that all subcontractors under them have general liability insurance. If there is a negligent act a lawyer can include anyone working on a project.

* Certificates of insurance can be processed on the same business day as the request as long as the contractor is not attempting to do so at the last moment.

* A good method to verify that a certificate of insurance is sent is to have the agent fax you a copy of the certificate when they mail the original to the customer

Issues general contractors should be aware of include the following:

*You can usually bid on a job without Contractors General Liability Insurance, but often you can not start the work without the policy in place

*It is the general contractor's job to ensure that everyone working with them or under them is covered by liability insurance.