9 Mistakes Contractors Make When Purchasing General Liability Insurance
When it comes to general liability insurance for contractors, the first critical mistake is to NOT have one. This is because general liability insurance is often required and/or highly necessary for many types of contractors – whether you work in construction, home renovation, plumbing, snow removal, and so on.
As a contractor, the moment that you decide to get general liability insurance, you’re already one step closer to a more successful and secure future. General liability insurance for contractors will give you extensive protection when it comes to lawsuits regarding third-party injuries and property damage. However, not all general liability insurance plans are the same and it’s possible to make mistakes when purchasing one.
Here are the most common mistakes to avoid when getting general liability insurance for contractors. Let’s begin!
1. Thinking That You Need to Do Everything Yourself
For anyone who is new to getting general liability insurance for contractors, it’s easy to get lost amidst the numerous options available. It’s also easy to mistake that you need to process all available options by yourself. In reality, a good insurance broker will be able to do this for you in a far more efficient and hassle-free way.
2. Not Knowing the Difference Between an Insurance Agent and Insurance Broker
Insurance experts who help businesses get started with commercial insurance may, at first glance, look all the same. However, there is a stark difference between an insurance agent and an insurance broker. Therefore, choosing one or the other will put you on wildly different paths.
Essentially, insurance agents offer insurance policies as representatives of an insurance company – and typically just one company. This means that their range of options is limited to what that specific insurance company can provide.
On the other hand, an insurance broker works for you. Insurance brokers from trustworthy insurance brokerage firms, like Contractors Insurance, can easily present and compare various insurance options that fit your needs as a contractor, business owner, or professional.
3. Getting an Insurance Provider That Doesn’t Care
We’ve already established that working with an insurance brokerage firm will put you one step ahead in terms of having more options. However, the next crucial thing to look at is the culture and scope of service of the insurance brokerage firm that you are considering.
Some companies may offer poor customer service after you’ve purchased general liability insurance for contractors. This is not just an ongoing unpleasant experience. In fact, slow and unclear customer service can have serious repercussions. You may not get your policy updated in time, you may be misinformed about the claims process, and so on.
In summary, look for a company that genuinely cares and is willing to go above and beyond to assist you with your insurance needs.
4. Not Understanding the Risks Involved & The Critical Role of Insurance
Some business owners, contractors, and professionals just get insurance for the sake of getting insurance. They do this either because it’s required or because having a certificate of insurance will help them win the trust of more clients. However, this is a common erroneous mindset that must be avoided if you want to get the best general liability insurance for contractors – or any kind of business insurance for that matter.
The problem with this mindset is it causes some businesses to settle for substandard or bare minimum coverage.
However, the risks are real and insurance needs to be able to address these risks effectively. This goes double for hazardous industries like construction, wherein it’s estimated that more than ¼ of the workforce has, at some point, suffered an injury on the job. Furthermore, third-party injuries are highly common as well – whether it’s due to falling debris, being struck by mobile construction equipment, and so on.
Apart from risks of third-party bodily injury and property damage, general liability insurance for contractors covers far more. In fact, reputational injuries (e.g. slander, libel), as well as advertising injuries (e.g. copyright infringement), are also covered.
5. Not Knowing the Limitations of General Liability Insurance for Contractors
Alongside knowing the importance of general liability insurance, businesses need to also know what it does NOT cover. As a contracting business, knowing the limitations of general liability insurance for contractors will help you know if you need added coverage. And from there, you can take the next steps towards better risk management by exploring options for policy add-ons from a trusted firm like Contractors Insurance.
6. Not Taking Time to Understand The Insurance Policy Before Signing
If you’re signing up with an insurance brokerage firm that truly cares for your needs, then they won’t mind answering your questions. So don’t just skim through your insurance policy; take time to read it and point out anything that confuses you or does not sit right with you. If adjustments need to be made, then so be it.
7. Not Knowing When to Update An Insurance Plan
For many who are getting started with general liability insurance for contractors (or any kind of business insurance), they might think that signing the policy, getting the certificate of insurance, and then paying the premium is all there is to it.
However, updating the insurance plan is also required whenever major changes are made to the business. To learn more about when to update insurance, feel free to read our guide: When Should You Update Your Business Insurance Policy?
8. Not Considering Other Needed Coverages
As we mentioned earlier, general liability insurance for contractors has its limits. Therefore, it would be a mistake to not consider other needed coverages – such as builder’s risk, commercial property insurance, pollution liability insurance, and so on.
Your business faces its own unique set of risks and it’s beneficial to get a fitting insurance bundle to address such risks.
9. Thinking That General Liability Insurance for Contractors Includes Subcontractors
Typically, general liability for contractors will not include the subcontractors that you hire. For this reason, companies who hire subcontractors typically require them to have their own insurance.
Personalized General Liability Insurance for Contractors
Contractors Insurance specializes in providing personalized general liability insurance for contractors. On top of this, our expert team can assess your business’s unique risks so that you get the exemplary coverage that you deserve. Last but not least, we offer the most hassle-free commercial insurance available – all thanks to our dedicated team who is ready to assist you with all your insurance needs!
If you have questions for us or you’d like to get a free quote, please feel free to reach out to us!BACK TO ALL ARTICLES
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