An Overview of Contractor General Liability Insurance

General liability insurance is a form of insurance that aims to protect the owners and operators of businesses from a wide range of liabilities arising, for example, out of accidents in the premises, operations of the insured party, contractual liabilities and products manufactured by the insured parties and so on.

It is difficult for contractors to do their business without general liability insurance. The rates of insurance depend upon the type and the size of the work that the contractor does, his gross receipts, the total payroll expenses and the specific risks involved. It is believed that a cover of around $1 million to $2 million of liability insurance should be sufficient for an ordinary contractor. It is always advisable to do comprehensive shopping for rates before finally settling for any one insurance company in California. It is advisable to use the services of the insurance company that is 'admitted in California' and enjoys the ratings like the brand companies do, that is, A++, A+, A, A-, B+, and so on.

There are many contractors' general liability insurance companies in California. Their clients include contractors, sub-contractors and businessmen of all types.

The fact of the matter is that it is difficult for contractors to work without general liability insurance due primarily to the nature of their work. They may have to face liability claims from a wide range of resources.

A general contractor, for example, involved in construction work faces many insurance liability challenges from a wide range of sources like engineers, artisans, electricians, plumbers, roofers, air conditioning technicians, insulation providers, general laborers and so on. Construction activity is widely varied, improvised and contractual. Putting at risk every worker from the scaffoldings, planks, manholes, jungle of electrical cables and many other obstructions to smooth and hassle-free work. The more workers you have involved, the greater the liabilities and the risks. The more varied your operations, the higher your chances of insurance claims and lawsuits.

Also, there are the subcontractors and their employees. The chief contractor has to ensure that all his sub-contractors and their men have adequately insured liabilities. Although the subcontractor is technically not an employee of the contractor and is an independent entity, still the lawyers can find reasons to rope in the main contractor though he may not be directly involved.

The general contractor's work is vast and varied and so are his risk liabilities. The management of the company owning the construction site or the clients may hold the contractor professionally responsible for any errors of omissions and commissions causing mishaps during the course of work. They would, therefore, try to shift their noose around the neck of the contractor. The contractor must also buy the professional liability insurance, also known as Errors and Omission insurance to protect himself and his company from the claims of the clients who may hold him responsible for errors and also the delay in completing the project as per the agreed schedule.