Contractor General Liability Insurance: A Guide for Small Businesses

Contractor general liability insurance is required by all construction related companies, whether the contractor is involved in commercial or residential construction. The purpose of the general liability insurance is to make sure that any liabilities that arise from a worksite is covered.

About Contractor General Liability Insurance

Contractor general liability insurance covers accidents that occur at a construction site. It also provides protection for the general contractor against any damages caused by subcontractors. In every construction project, a contractor is required to maintain a certain amount of general liability insurance. This requirement is in place for both small operations and large construction companies.

Small versus Large Operations

The first thing that a small operation must do is determine the type of coverage it needs. In other words if the sub only bids on residential home construction jobs, the coverage that should be purchased should cover only risks associated with building homes. The same goes for small operations involved in large scale commercial construction, building roads, bridges or other structures.

Seek an Experienced Agent

Once the small operation determines the extent of its business activity, they should seek out an experienced insurance agent or broker that represents many different companies for quotes.  Most people at this point may suggest going online and shopping different companies for rates but buying contractor general liability insurance is not the same as buying car insurance. This process should take place face-to-face and be handled by a professional insurance agent who understands the nature of covering risks. A contractor would not recommend that an inexperienced person engage in rewiring their home’s electrical system; the same principle holds true for buying insurance.

A broker or agent that has been in the business at least 5 years knows the different companies that are out there.  They can advise the small operations seeking contractor general liability insurance on the best type of coverage relative to their business type.  This helps the small contractor get the best insurance for the best value.

Contacting Local Associations

Finding an experienced insurance agent or broker can be accomplished by contacting a local Independent Insurance Agent Association or chamber of commerce. These organizations can provide the names of qualified or experienced producers that have the expertise in insurance.