One of the most important requirements necessary for licensure is general liability insurance as well as worker’s compensation insurance. General liability insurance protects you and your business from “general” claims involving bodily injuries and property damage. Almost every business has a need for general liability insurance but contractors have an even greater need than most. The insurance covers construction areas and projects under the care, custody and control of the general contractor. The insurance covers claims and judgment or settlement costs that may occur during the project, as well as after the project is completed.

Types of coverage

• Bodily Injury coverage includes medical expenses that were incurred due to an injury on the job.
• Property Damage coverage pays for damages to a property caused by the contractor (or its employees, subcontractors etc.), and could include damage to buildings, vehicles and pets.
• Product / Equipment coverage is for damages where equipment or products installed by the contractor malfunction or are not installed properly.

Who needs Contractor Liability insurance?

Contractors Insurance can be purchased by:

• general contractors,
• subcontractors, and
• property owners who are acting as their own general contractor on a construction project.

Contractor liability insurance is needed primarily by the general contractor. However, subcontractors should also maintain their own coverage. If the subcontractor does not have insurance of their own, the general contractor will be liable for damages caused by their subcontractors. All insurance carriers require that your subcontractors carry the same or higher coverages than your policy or they will be considered uninsured contractors and you will be balanced billed at the end of the policy year.

Worker’s Compensation Insurance is necessary when a company has paid W2 employees other than the owners themselves. Worker’s Compensation coverages differ depending on the job scope of the employees. Each class code has it’s own rates and the annual premium will reflect the individual codes and the payroll associated with each.

With new companies that consist of just an owner or owners, it is best to file a Worker’s Compensation Exemption. Artisan Insurance Inc. can process this exemption for you if you fit that category.