General Contractor Insurance

OVERVIEW: GENERAL CONTRACTOR INSURANCE

Construction is one of the most important parts of the United States economy. It is formidable contributor to both employment and economic activity. It also serves to improve productivity along with quality of life.

During 2012, non-residential construction (including specialty trade contractors) contributed $573 billion dollars to the US economy, of this $303 billion was private construction and $269 billion was public building (paid for by government). Also, general and specialty contractors employed 2.7 million people on these jobs.

Housing construction hired an additional 2.9 employees worked in the sector of construction accounting for 2.9 million employees. It represented 5.3 percent of gross domestic product and contributed $89.04 billion to the economy.

Even though 2012 was the first year existing home prices began rising, it was a good year for new home construction too.

Project owners hire general contractors. The portion of the contract called ‘Scope of Work” is the most important part of most contracts. Naturally, the scope of work for each project is different. General contractors like their scope of work in a contract to be precise, tight, and narrow. Subcontractors feel the same way. Project owners want loose and broad definition so contracts are more all-inclusive. Contractors, subcontractors, and project owner seek their range of work contract portions these ways for one simple reason, liability. The contract not only sets the scope of the project; it is a determining factor in liability determination.

To obtain the lowest premiums, contractors must know their business well. They need a tight scope of work, and they need their subcontractors to name them as other insured on all their liability insurance programs.

TYPES OF GENERAL CONTRACTOR INSURANCE

Worker’s Compensation Insurance

In California and most other states, every business must carry Workman’s Compensation insurance in case of a work-related injury or illness. In addition, each subcontractor must produce a certificate of worker’s compensation insurance. Subcontractors who do not carry worker’s comp put the general contractor at risk – the GC may be held responsible for the worker’s injury.

General Contractors Liability Insurance

This policy is the primary insurance that general contractors buy for each project. Coverage features include:

Bodily injury

Property damage

Medical payments

Extraordinary situations such as defense costs if sued as well as cost of bonds

Interest charge and taxes related to judgments

Employee and general contractor coverage for incidents stemming from your operations.

Personal and advertising injury

EXTRA’S TO CONSIDER FOR GENERAL CONTRACTOR INSURANCE

Premises Operations Liability

This insurance works as protection for bodily injury or property damage suffered by third parties resulting from ongoing operations. Imagine someone walking through the job site who trips and injures his ankle. Premises Operations Liability insurance covers a claim for a third party’s injury.

Products Completed Operations Liability

A faulty electrical panel in an office building your construction company was the general contractor cause a fire. This protection covers claims by office workers injured in the fire.

Independent Contractors Liability

These policies protect an insured contractor for injuries or damages caused by a subcontractor. In the above example, injured business office employees would be covered under a subcontractor’s insurance.

Contractual Liability

Frequently, the project owner asks for a hold harmless clause in the contract that places all liability for an injury to a member of the public sustained while walking through the project site. Contractual liability insurance causes the contractor’s general liability to cover the project owner for any liability he or she may have to the injured party.

Even more coverage endorsements are available for things such as construction equipment insurance, aggregate limits for each job site, and more.