Do you a business contractor? you often need comprehensive contractor insurance which protects you in every situation during business operations. There are many different types of insurance policies which are designed to protect business owners. And contractors in various parts of contract projects. In fact, certain projects require insurance policies to prevent any losses in business. In the below mention, we will review the importance of contract insurance and the most common types of insurance policies available in the market.
If you are confused about which policy should you select we will guide you.
What is contractor insurance:
This is a standard insurance policy that covers against liability, property damage, and major bodily injury and other unexpected damaged that can happen, unfortunately at the work site. Liabilities included in it are worker compensation, property damage, damage at the work site, damage to tools, and protect your machinery and yourself. Comprehensive insurance covers all aspects.
Why you need to have contract insurance:
You need to have contractor insurance because construction work is considered as most dangerous work and the risk involved in it is very high. A small mistake can destroy the whole work and the contractee suffer a loss. Natural disasters like earthquakes and thunderstorms etc destroy your ready-made work and you suffer a big loss. This is why you need this insurance policy so that you are protected from any business loss.
Types of contract insurance:
There are many types of insurance policies that are available in the market which cover your loss in any situation.
general liability insurance for contractors: general liability insurance is the most important insurance in contract terms. It protects you from third-party claims like a bodily major injury, property damage and contract damage as a result of business activity.
The cost of general liability insurance is depending on various factors, like.
- Your Business location.
- Your contract site.
- Contract size.
- Contract nature.
- Previous claim history.
- Policy limits.
Contractor all risk insurance
this policy has two sections to cover all contingencies and risks involved in contract work. Contractor plant & machinery, tools related to work, and third-party liability involved in the execution of the contract.
Part 1; material damage: this policy cover loss of damage to material due to any mistake or because of unprofessional staff and other ancillary facilities on a comprehensive basis.
Part 2; third party liability: this policy will cover the legal liabilities to third-party damage like a bodily injury which is resulting at a construction site, and property damage of third-party which is in connection with contract work.
Comprehensive contract insurance:
In a comprehensive contract insurance policy, all factors related to contract work are involved in this single policy. It’s your choice to choose comprehensive or other policies according to your need. The risk involved in it is that other types of this insurance won’t cover all factors in complicated situations.
For example, if you choose a contractor general liability insurance then in case of any mistake all work becomes destroyed and this mistake causes loss to a third party. Then the general liability policy not covers the third-party loss it will only cover you according to the policy agreement.
On the other hand, the key benefit of comprehensive insurance is it covers all risks related to contract work like contractor equipment, contractor liability insurance, building contractor insurance, fire, theft, flood, collapse, earthquake, and accidental damage etc.