California Contractors Insurance Agents In LA Know Why Contractors Need General Liability Policies

By Rebecca Trejo

Getting into the construction business requires more than a talent for building and a good set of tools. You will have to get licensed and show proof of bonds and insurance. It may be tempting to skimp on your coverage because of the expense. This is always a mistake. If something unexpected happens, you will be held liable. This can have catastrophic consequences. That's why California Contractors Insurance Agents In LA always advise their clients to take out, and keep current, a good general liability policy.

General liability protects you in the event someone gets hurt on the job site. It will protect you against being personally liable for property that is damaged in the course of a project. General liability will even protect you from something that happens after the project is completed as long as it happened during the time the policy was in place. Many times the contractor has to show that a general liability policy is current in order to be considered for a job.

What the policy costs you depends on several factors. It depends on where you are in the country, your payroll, receipts and cost of subcontractors. A contractor without employees can expect to pay somewhere in the range of eight hundred and thirteen hundred dollars a year. Contractors who have payrolls in excess of one hundred thousand dollars will spend more the two thousand dollars a year.

There are a number of factors that can modify the cost of the premium. One of them is the number of years a contractor has gone without making a claim. Credit scores and experience can also make a difference. The amount of the deductible and other coverage included in the policy will also affect the annual premium.

General liability will cover a number of instances. That includes illness, injury, and death. Damage to property is included. If the property involved is damaged to the point there is loss of use, you are covered.

You can be covered in the event a laborer claims illness or injury after the project has been completed. If someone accuses you of publishing slanderous or libelous materials, or of copyright infringement, your policy will cover it. Most contractors aren't affected by this aspect of their policies.

There are two basic types of general liability policies. You can buy an occurrence policy that will cover claims made at any time as long as the policy was in place when the event happened. With this policy, when the claim was filed doesn't matter. In most instances a claim can be made up to ten years after a project was completed and still be covered by a policy. A claims made policy covers an event only if the event and the subsequent claim occurred during the time the policy was in place.

Insurance companies have the right to conduct a premium audit. They check if they see a discrepancy between what the contractor puts on an application and the exposure to themselves they actually see. Audits may be conducted at any time.

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