Carrying general liability insurance as a general contractor is one of the most important components of your business. Not only are you required by law to carry general liability insurance, but more and more cities and counties are making it a requirement to do work. I’m going to outline the obvious reasons why you should always carry liability insurance, but also some helpful hints on obtaining the correct insurance for your business and how it can help you grow.


Because it’s the law!!!

Carrying general liability insurance is not an option, its the way! If a contractor is in your home and damaged property you would expect their insurance to cover the damage. Why would anyone else expect anything less of you? Many contractors make the argument “I would fix anything I broke or redo any work not up the home owner or businesses standard.” That theory sounds good, but the real truth is the relationship becomes toxic quickly. In life we only get one chance to make a good first impression. Most home and business owners hiring you to do work quickly lose faith in your ability to get the job done if there is damage or work is performed incorrectly. Having general liability insurance eases all tensions because that home or business owner knows they’re covered.


Pulling Permits

In every state, city and county in the US we are getting more regulated. Face it, our local, state and federal government has more of a say in how we conduct our business than ever. The trend is growing rapidly for contractors to show proof of insurance to these branches of government. By not providing your insurance they will prevent you from doing work in those cities, counties and states. Don’t be that contractor! To avoid this some contractors have their sub-contractor pull the permit. If you are caught doing this it will affect your ability to do future work in those areas. Again, don’t be the one. Get your INSURANCE!


Stand out against your competition

As mentioned above, more and more areas have become more regulated and require proof of insurance to pull permits and perform work. However, there are those exceptions. Still today there are places that will not check your insurance. Use this to your advantage! Educate your customers that while the city, county or state doesn’t force you to carry insurance, you should still provide it. This is important when putting in a bid. Your competition may submit a lower bid, but you can give them the satisfaction of knowing you conduct business the right way.


Getting the right type of coverage

Everyday we see contractors that carry the incorrect type of coverage. Question your agent! Cost means nothing if you are carrying the wrong insurance. When obtaining quotes the first and obvious question from contractors can be “what’s the cheapest policy you can get me.” Saving money is great, you are running a business. Insurance is not a corner to be cut. Several contractors fail to pass this onto their customer. At the start of the year, try to estimate the average number of jobs you’ll be performing and pass on the cost of your insurance into each job. If you are buying sub-par or low quality insurance it may exclude those important elements that could get a claim denied. Make sure your agent knows everything you do and writes you the

Written by: John Brown
John has more than 25 years of experience in the insurance industry. He grew from a star insurance producer to owning one of the largest agencies in the country; he's a reference regarding contractor's insurance, commercial insurance, and builders' risk insurance.