What is General Contractor’s Insurance?
Being a Building Contractor is a rewarding occupation. As with any type of business you need to have insurance coverage to protect your business. You need to remember besides your home your business is your largest asset. Not only that, it is the way you make the money to pay your bills and support your family.
Do you really want to risk all that you worked so hard for by not having the proper General Contractor’s Insurance you need. If you keep reading there will be a few industry insider tips in the sections below that will give you new insights and also ways to save money.
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When it comes to getting a fast and free quote for affordable General Contractor Liability Insurance FarmerBrown.com is the best choice on the internet.
Our knowledgeable agents will be able to assist you to get the coverage you need. You can have confidence that you are getting quality coverage at an affordable price when you use FarmerBrown.com for General Contracting business insurance needs.
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Who Needs To Get General Contractor’s Insurance?
In some States, General Contractors are required by law to have a General Contractor’s Liability Insurance. Even if the State does not require most cities will require that you show them proof of General Liability Insurance before they will issue you a permit.
Regardless of whether or not you are required to have it as a responsible business owner, you should have it. Why would you risk everything you worked so hard for just to save a few bucks.
What Insurance Does A General Contractor Need?
General Contractor’s Insurance starts at a bare minimum with an General Liability Insurance policy. Every Building contractor should have this type of insurance. If your business has employees you are usually required by law to have Worker’s Compensation Insurance coverage as well. Failure to have Worker’s Compensation Insurance can lead to large out of pocket expenses if an employee is injured on the job. It can also lead to large fines and extreme cases of criminal prosecution.
Other more specialized types of insurance coverage General Contracts may wish to obtain are Commercial Auto policies that cover vehicles used in the course of the business. Inland Marine Insurance for General Contractor’s to cover the loss of tools and equipment. Finally, Umbrella Insurance or Excess Insurance offers protection from catastrophic losses exceeding underlying General Liability Insurance.
Cheap General Liability Insurance for Contractors
This covers many of the possible situations you face as a General Contractor. It covers property damage and injuries you may cause to third parties while you are doing work. You face many different risks on job sites when you are a General contractor. It would be foolhardy to operate without the proper General Liability Insurance.
If you hire subcontractors to help you out on a large project, you will want to have them name you as an additional insured on their policies. If you do not when your policy is audited the amount you paid them will not be deductible from your sales. The insurance company will treat them as uninsured subcontractors causing your General Contractors Insurance premium to increase.
This type of coverage protects the property that your General contracting business has if you operate out of a physical location. If you have a physical location you should have this coverage. It covers losses to the physical structure and any equipment or machinery stored there. If a covered loss damages the structure or the machinery/equipment stored inside, your commercial property insurance policy would help to cover the cost of any necessary repairs or replacements. We all know the heavy equipment need to run a General Contracting business is expensive. You need to make sure all your equipment has the right coverage. Without your equipment and/or the money to replace it you will be out of business in a hurry.
Your personal auto insurance policy will not cover any vehicles that are used in your business. This even includes your personal vehicle if you are using it for income-producing purposes. If you use trucks, vans, or any other vehicles for your General Contracting business, you will need to purchase commercial auto insurance. This type of policy protects third-party vehicles and other types of property that are damaged as a result of an accident the driver of your commercial vehicles cause.
For example: if an employee sideswipes another car while she is driving a work truck, your commercial auto insurance would help to cover the damages of the other vehicle and any bodily injury.
If you have any employees you will also need to carry workers’ compensation insurance. This is the law in almost every State. This type of policy covers work-related injuries or illnesses that your employees may sustain.
For example, if a during the construction of a new building a worker falls off the roof and breaks his back, workers’ compensation:
- Will pay for any related medical expenses.
- It will also cover the wages he lost during recovery.
- It can also help to pay for any training he might need for a new job if he is unable to return to work as a result of his work-related injuries.
- It can assist with legal defense fees, should the employee take legal action.
- It will also prevent you be fined large amounts for failure to have Worker’s
Inland Marine Coverage
Inland marine insurance is coverage that covers your equipment while at the job site or in transit.
For example, a General Contractors Insurance inland marine policy will cover theft of bulldozers, skid steers, generators and other equipment from a job site. Because General Contractors work at different job sites, inland marine coverage is essential. General Contractors businesses usually purchase inland marine insurance to cover their expensive and vital equipment.
If you purchase or sell any equipment you need to let your insurance agent know. If a new piece of equipment is stolen and was not reported to the insurance company coverage issues may arise. Conversely, if you no longer have a piece of equipment it makes no sense to pay for insurance coverage.
At FarmerBrown.Com we can handle all your bond needs quickly and hassle-free.
There is two main situations that General Contractors will need bonds:
License and Permit Bonds:
Many Cities will require you to obtain a bond before a permit or license will be issued. This is especially true when you are building a new structure or you have to do work in the right of way, such as connecting sewers to a City system.
Payment and Performance Bonds:
General Contractors or Property owners may require that you obtain these bonds before you start a large project. These bonds guarantee that you perform the work as contracted If your credit is above 700 these are relatively easy to get for jobs under $400,000. The cost is 3% of the contract price.
For larger bonds, the rate is usually much lower. There is however a more complicated review of the financial status of the business. Business financial statements will be required along with a more comprehensive application.
Always add the cost of any bond to your original bid, it is an overhead cost like any other. Remember that if the original bid specs did not mention a bond and now the owner is requesting it make sure that they are aware that there will be an additional cost.
What Does General Contractors Liability Insurance Cover?
Damages to Third Parties Property
Bodily Injury to Third Parties
Product and Completed Operations
Personal Advertisement Injury
- Damages to Third Parties Property. You are installing a new roof and the wind blows materials from the roof damaging cars below.
- Bodily Injury to Third Parties.Same situation as above but the materials hit a pedestrian causing an injury.
- Product and Completed Operations. Coverage is provided for Bodily Injury and Property Damage after a project is completed. This only covers work performed during the policy period
- Medical Payments.Medical expenses are covered for bodily injury caused by an accident during the policy period. Coverage is typically limited to $5,000.
- Personal and Advertising Injury. This is not a common claim in a General Contractor’s General Liability Insurance Policy. It usually is a copyright infringement, or publication of material that slanders, libels or violates a person’s right to privacy. You put a picture of a past client’s house on your website and do not get their approval. They sue for a violation of their privacy.
What Is Not Covered In a General Contractor’s General Liability Policy?
There are a number of things that are not covered in General Contractors General Liability Insurance policy.
Injuries to Employee’s
Coverage for Vehicles
Theft of your tools or equipment
Employee steals something from a client
Bad design or planning
- Injuries to employee’s, you need to have separate Worker’s Compensation insurance to have coverage
- Coverage for vehicles, you need to have a Commercial Auto Policy to protect you for the value of the vehicles and protection against any claims for property damage or bodily injury.
- Theft of your tools or equipment. You need to have Inland Marine coverage.
- Coverage if one of your employees steals something from a client. You need to have an Employee Dishonesty Bond.
- Coverage for bad design or planning. You need a Professional Liability Policy or Errors and Omissions Insurance.
- There is no coverage for faulty workmanship with a General Liability Policy.
How Much Does General Liability Insurance for General Contractors Cost?
There are a number of factors that determine how much a General Contractor will pay for General Contractors General Liability Insurance.
It should be fairly obvious that the more revenue you bring the greater the risk of something going wrong.
Number of Employees
Again the greater number of people you have working for you the greater chance of a claim.
If you have had a number of claims in the past your rate will go up. Conversely, if your claims history is clean you will pay a lower premium.
Location of Business
States like California and New York will have much higher rates than States like Texas and Indiana. Even the City where you do your work may matter.
For example: if you do work in the 5 Burroughs in New York City you can expect to pay up to 3 times as much as the same business located in Houston Texas.
Amount of Deductible
Just like your auto insurance, the higher the deductible for your General Contractor General Liability Insurance Policy, the lower the premium.
If you need coverage amounts greater than $1 Million/$2 Million your premiums will be higher.
Type of Work
If you do residential or commercial work will be a factor. Also if you do mostly ground-up new construction your rates will be higher.
If an insurance agent offers you limits under $1 Million/$2 Million such as $300,000/$600,000 run the other way. This will usually only save you less than $100 in premium. In today's lawsuit-happy environment with outrageous verdicts and attorney's fees, it does not take much of a claim to exceed $300,000.
Cost of General Contractors Insurance General Liability Policy Limits $1Million Per Occurrence $2 Million Aggregate*
|Cost of General Contractors Insurance|
|Total Revenue||General Liability Policy Limits $1Million Per Occurrence $2 Million Aggregate*|
|$250,000.00 in Revenue||$1,289.00 annual premium|
|$500,000.00 in Revenue||$2,365.00 annual premium|
|$1Million in Revenue||$4,232.00 annual premium|
|$2 Million in Revenue||$7455.00 annual premium|
|$3 Million in Revenue||$10,227.00 annual premium|
*Please note this are just ballpark estimates and are not to be viewed as an offer to sell insurance, Your actual price will be subject to the various factors listed above.
FAQ About General Contractor’s General Liability Insurance
Does my General Contractors Insurance policy cover subcontractors?
Some policies offer coverage for uninsured subcontractors. This is usually not a good idea for a number of reasons such as you will be responsible for any claims they may cause. You should always require any subcontractor you hire to provide you a certificate of insurance naming you as an additional insured. If you do not get these certificates of insurance the amounts you paid to these subcontractors will be included in your sales. This can cause your premiums to go through the roof. You should always get these before they start any work
It is also important to get certificates from subcontractors in the event of a claim. If the subcontractor does something that causes a claim it will go against their insurance, not yours.
What does a 1099 “Employee “ Mean?
This might be the most misused and misunderstood phrase in the General contracting business. It is as wrong as describing a circle as a square. 1099 is an IRS form that you are required to issue to people or companies that are NOT employees you pay money to during the tax year. These are parties that technically operate there own business. They are not W-2 employees of the business and require their own insurance. The legal definition of what an actual 1099 party can be found HERE. The truth be told most people classified as 1099 by contractors should not be. They do this to try and get around Worker’s Compensation laws and avoid paying taxes that would be required if they were treated as employees.
Do 1099 contractors need insurance?
If you use people or contractors that you pay as independent contractors, commonly referred to incorrectly as 1099 employees, you need to collect certificates of insurance from them. If you do not the insurance company for audits and claims purposes treat them as uninsured subcontractors. As a result, any claims and the amounts paid to them will cause your premiums to increase.
Cheap General Contractor General Liability Insurance near me
At FarmerBrown.Com we are as close as your phone or computer. We are licensed in all 50 States and can get your General Contracting business insured and ready to go the same day. We can get you the certificates of insurance you need in a matter of minutes.
Do you charge for Certificates of Insurance?
There is never a charge at FarmerBrown.com for certificates of insurance. We have some of the fastest turnaround times in the industry to get you the certificate you need. Our dedicated team will have you your certificate in under an hour in almost all cases.
I always see licensed, Bonded, and Insured on my competitions vehicles, website, advertising, etc. what does that mean?
This is a good advertising tool. It tells your prospective client that you have insurance, the necessary license, and have a bond. Since there is generally not a bond requirement in most States you can purchase an employee dishonesty bond for less than $200 to cover this.
Get your bond and certificate of insurance laminated. When you go to meet with a client you can show them you are bonded an insured. This will make you look more professional and give you a leg up on any competitor bidding the same job.
What Are The Key Benefits Of Choosing FarmerBrown.com For Cheap General Contractor’s General Liability Insurance Quotes
We have experienced team members that can analyze and recommend the appropriate coverage for your General Liability Insurance needs. All General Contractor’s need at least General Liability coverage. Protecting your business, yourself, and employees with quality affordable insurance coverage is key. We are here to help customize this coverage to your needs.
- Our team members are professional and knowledgeable and able to help you choose the perfect policy for your needs.
- Having a General Contracting business requires specialized General Liability for General Contractor’s Insurance to cover your unique needs.
- Flexible agents to work on your time schedule.
- We provide easy online payment options.
- We are licensed in all 50 States to offer General Contractor’s General Liability Insurance.
- Same day service in most cases.
- “A” Rated insurance companies that pay claims quickly.
FarmerBrown.Com has the capability to provide quotes for the hard to place risks and get you insured quickly and conveniently. We have the experience to analyze and recommend the appropriate General Liability Insurance Coverage. Call now to speak with a knowledgeable agent. Our experts can review your needs and get you the proper coverage your business deserves. They will make sure you have the coverage you need at the best price for you. Best of all, you can get a free, no-obligation quote in minutes
By selecting the best policies from the nation’s top insurance carriers FarmerBrown.Com is able to deliver coverage that represents the greatest value for you. You can obtain a General Liability Insurance quote by clicking here, or by calling (888) 973-0016 today to find out more about the extensive insurance programs offered by FarmerBrown.Com to reduce premium cost and risk. Let the FarmerBrown.Com team make obtaining insurance coverage trouble-free. Get the coverage you need at the rates you deserve.
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