In most of the construction contracts, general contractors call the shots, and take the lead in all vital operations, including supervising job sites, coordinating with subcontractors, and various other responsibilities to ensure that their projects stay within budget, and are completed on time.
There are many potential risks to the property while it’s under construction, and in order to avoid devastating losses due to lawsuits and to protect your business, it is necessary to carry a contractor’s builders risk insurance policy.
This type of builders risk insurance policy is designed to cover the property during the course of construction.
There is a common misconception that this safety net for contractors applies only to the general contractors. However, subcontractors such as roofers, carpenters, masons, landscapers, plumbers, electricians, and other trades are equally liable as well. Since most of them are involved in a complex business relationship, most of the contractors should rely on an insurance provider as they design their policies to provide maximum protection to their customers.
Most of the contractors are aware of the common construction risks, such as not getting paid on time, injury to various subcontractors, not adhering to agreed timeframes, and other associated risks that should be considered when drafting an agreement. The contractor insurance policy is valuable for builders because these polices may also include provisions such as workplace safety, and negligence.
Whether you are a contractor, or a subcontractor, who is interested in contractor insurance, you should understand about the coverage being provided to you by the contractor insurance company. Usually, this insurance covers worker’s compensation, general liability, business automobiles, tools and equipment, builder’s risk, employee benefits, and bonds commercial umbrella.
You should keep the following risks in mind when you are planning to speak with your chosen contractor insurance company.
- Defective Products- In any project, the contractor is accountable for all the actions and work of subcontractors. For instance, if a subcontractor installs a living room fan that accidentally catches fires and burns few areas of the house, the manufacturer of the product is responsible, but both contractor and subcontractor will also be involved in the costly lawsuit.
- Construction Contracts – Everybody signs contracts with best intentions, but if anything goes wrong, finger starts pointing. So contractor should get the contract reviewed by the lawyer and should also buy a good contractor insurance for every single job, as it is the best safety net for contractors.
- Litigation Costs – Whether you are a sole proprietor doing a remodeling project, or a specialty tradesman, or something in-between; you should do everything to protect yourself from expensive litigation by buying an insurance policy.
There are few important things that you should consider when you are planning to get coverage from a contractor’s builder’s risk insurance policy for your construction job. Make sure that the builders risk insurance companies you talk with are certified to cover the type of construction risks for your type of work.