There are many benefits to being a contractor, but it also comes with a lot of responsibilities.
You may be working flexible hours, but you have to finish the job within the timetable you and your client have set for it.
The income may also be way better than if you were an everyday employee, but you also have to set aside a budget for contractors insurance.
Some contractors may see contractors insurance as an unnecessary expense, but the smart ones know that they have to get insurance coverage if they want to protect themselves and their business from anything untoward that may happen to projects they’re undertaking.
Contractors insurance is absolutely necessary, even more so if you are a general contractor.
What is a general contractor?
A general contractor, also known as a main contractor or a prime contractor, is the one in charge of a building project. General contractors oversee the operations of a construction site, manage employees, subcontractors, and suppliers, and communicate the progress of the project to all parties involved.
As the main man on a construction project, a general contractor is responsible for safeguarding more employees, subcontractors, tools, equipment, and construction materials than your average contractor. It goes without saying that for work of such magnitude, a general contractor must have the right kind of contractors insurance coverage to get the job done without any hitches.
The benefits of contractors insurance
Contractors insurance protects your company from claims
Construction work always has risks attached to it. One of your workers could suffer an injury or even lose his life while on the job. Or, an accident caused by a wayward tool could hurt a third party within the construction site. Even property damage can happen in the middle of a building project. When any of these happen under your watch as a general contractor, you can expect lawsuits to come your way.
To protect your company from claims by injured employees, you must have workers’ compensation insurance. When you have this type of coverage, you should be able to provide for medical expenses and lost wages for your employees who suffer an injury or fall ill due to the work that they do for you. This type of insurance should cover any claim they make, and that means you won’t have to pay for them out of pocket.
General liability insurance, on the other hand, provides coverage for claims made by third parties who have sustained injuries or suffered property damage in the course of the construction project. It will cover the claims from the get-go and spare you from a costly and exhausting lawsuit.
Your tools, equipment, and materials are protected too
It is not unheard of for tools, equipment, and materials to go missing from a construction site due to negligence or theft. They could also be damaged in the course of the construction. As a general contractor, you are ultimately responsible for all of the above. Fortunately for you, all these assets can be protected by builders risk insurance, which typically covers materials, fixtures, equipment, and even the structure itself.
It ensures compliance with state and legal requirements
Contractors insurance is a requirement in practically all states. When a general contractor carries general liability insurance, workers’ compensation insurance, and several other types of contractors insurance, he is assured of an operation that is above-board and in keeping with the laws of a given state.
It boosts the reputation of your contracting business
Clients who commission building projects will always want their interests to be protected from anything that might happen during construction. More often than not, they only consider general contractors as candidates for their project if they have appropriate insurance coverage.
So if you have the right insurance policies, you can be sure that your company’s name will always crop up. With the boost your insurance coverage provides for your business’ reputation, your company’s chances of bagging any given construction project will vastly improve.
It gives you some peace of mind
As a general contractor, you are fully aware of how risky and unpredictable things could be in the industry. One day things are going well, then somebody gets hurt, or a portion of the construction project collapses the next day. For all the advantages of being a contractor, it is a pretty stressful job, because there are so many things could go wrong that could end the project—and your business—in the blink of an eye.
Thankfully, contractors insurance is there to allay all your fears. While no one wants anything untoward to happen at construction sites, the idea that you are covered for any eventuality is more than enough to bring your stress levels down. With contractors insurance coverage, you will have the peace of mind needed to go through any project or job with a sure footing.