A typical building construction project is made up of a few hundred—or in the case of a massive build, thousands—of contractors. Sitting at the top of that list is the general contractor. Also referred to as the main contractor or a prime contractor, a general contractor is the one responsible for overseeing a construction site’s entire operations. General contractors also manage all workers, subcontractors, and suppliers.
While most contractors also have their own employees, subcontractors, equipment, tools, and construction materials to worry about, their responsibilities are nowhere near the scope of that of a general contractor. In the same vein, regular contractors can benefit from contractors insurance, but never on the same level that a general contractor can. Let’s take a look at the ways contractors insurance can benefit general contractors.
Protection from claims
A general contractor is a big, ripe target for claims, especially when someone gets injured at the worksite, be it a worker or a third party.
If it’s employees who suffer an injury, then workers’ compensation insurance should be able to cover their claims. Medical expenses and lost wages will be paid for by worker’s compensation insurance, not out of the general contractor’s pocket.
If a third party like a pizza delivery guy or a visitor unattached with the project gets hurt at the build site, then a general liability insurance policy will kick in and pay for any claims they could make against the general contractor. That includes damages and attorney’s fees, among other things. General liability insurance also covers property damage.
Protection for loss or theft of tools, equipment, and materials
A general contractor with builders risk insurance is covered in case of the loss due to negligence or theft of tools, equipment, and materials from the construction site. Builders risk insurance also covers materials, fixtures, and equipment. Even the entire structure itself is protected by builders risk insurance.
Compliance with state requirements
Practically all states have made contractors insurance mandatory. So when general contractors hold general liability insurance, workers’ compensation insurance, other types of contractors insurance policies, they are in compliance with all state requirements, ensuring an operation that is legitimate and above-board.
A reputation boost
Clients will only hire general contractors who have all the appropriate contractors insurance protection. That means general contractors will have a much better chance of getting approached for building construction projects if their company is known to be carrying the right contractors insurance policies.
Peace of mind
The biggest benefit of contractor insurance can give general contractors the peace of mind that comes with such policies. Considering how risky and unpredictable things could be in the construction industry, knowing that contractors insurance has them covered for any eventuality will undoubtedly help them sleep better at night.
Some general contractors might think of contractors insurance as an unnecessary expense, but we all know what would happen if something untoward happened at the project site, and they don’t have coverage.
If you’re a general contractor, get the right contractors insurance policies. It’s the only way for your business to survive any tragedy or catastrophe that could happen at the site of your construction project.
About The Author
Rachel Porter is the content specialist for Custom Contractors Insurance, LLC, an Arizona roofing and contractors insurance company. When not writing, she enjoys reading and mountain biking with her friends.