What does contractors liability insurance cover?


No matter how careful you are in performing your projects, accidents and misfortunes may still get along the way. These are indefinite circumstances, which you do not have control over. Your people and equipment are not always a hundred percent working in perfection. In cases of accidents and machine failures, you, as the contractor, will experience certain delays and income exhaustion if legally obligated to cover the expenses. A contractor's liability insurance will, beyond doubt, protect you from being financially bankrupt.

A contractor's liability insurance basically covers all third-party claims. This also includes lawsuits and complaints filed by clients and other parties whenever damages and accidents arise in your business site.

The insurance will protect against claims caused by you or employees under your direct supervision. Contractors are like managers. They have to hire and employ many people to work on site. Sometimes, these people may also be assigned to travel and work in different locations. Because of this, there is a high possibility that these people may encounter accidents or cause accidents to passerby.

Contractor's liability insurance covers:

  • Bodily injury and Property damage. If a person is injured or suffers damage to his property, he can file a claim against the contractor.
  • Products and completed operations. If the contractor's project caused harm due to a defect, the insurance will step in to cover the costs subject to the policy's terms and conditions. This is even when the project or product has long been finished. For instance, if an electrical engineer is hired to setup the wiring of a house and the wiring proves to be faulty and results in a fire, the owners can sue the contractor.
  • Personal and advertising injury. This involves damages resulting from slander, libel or false claims.

If a contractor commits mistakes in the course of his project, this will be covered by the contractor's liability insurance. One good feature about this insurance coverage is that the contractor is endowed with a lawyer should the case necessitates legal proceedings. Through the contractor's liability insurance coverage, the insured name or contractor does not need to worry about the hassle. He can simply go on with his business operations and leave the case in the hands of the insurance company or lawyer.

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