WHAT ARE THE BENEFITS AND TYPES OF INSURANCE IN CONSTRUCTION CONTRACTS?
In any business endeavour, there are certain factors and variables that one can not control, thus it is essential that a particular insurance policy is subscribed to for proper backup.
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BENEFITS AND TYPES OF INSURANCE IN CONSTRUCTION
There are so many risks involved in working as a contractor. Due to the peculiarity of this job, a contractor is expected to launch construction plans and meet deadlines. It could be physically demanding. However, in any construction contract there are certain factors and variables that one can not control. Nonetheless, it is always a good idea to get extra protection by getting a construction liability insurance policy.
The following are the top ways contractor insurance can help you:
Protection against injury
The most common thought for getting contractor liability insurance is for protection against injury. As mentioned earlier, contractor work is very physically demanding and dangerous. Either you are high up in scaffolding, handling electrical wires, or using heavy or hazardous equipment, potential for injury or danger is always present.
Protection against property damage
There is always a chance for the property one is working on to be damaged due to one reason or the other. Contractor insurance can help you pay compensation for the damage that can happen.
Asset and employee protection
It will always be reassuring knowing that employees and the assets they are using are covered for anything that can happen.
Covering legal fees
In cases that the actions do lead to a court case, your insurance can help with legal fees. Court cases can last some time and can also take your time away from your work. You will at least have some help in the form of coverage for the different legal fees. This includes attorney fees, witness fees, and other court expenses.
Covering costs and damages
In cases that you have been found responsible by a court judgement, you can also use your contractor insurance to help pay for the costs and damages demanded.
TYPES OF INSURANCE IN CONSTRUCTION CONTRACT
Commercial General Liability Insurance
This takes into account claims made by third parties for property damage, bodily harm, or personal injury that took place during contracting work. The damage can include that which is caused by your business’s operations or injuries that take place on company premises. The coverage provided by commercial general liability insurance typically includes:
Bodily Injury and Property Damage Liability
This offers compensation for physical injuries or property damage that may have been caused by your contracting business. This can take into account employee accidents or a client falling or slipping. The insurance policy would substantially cover most of the expenses to provide you with a financial cushion.
Personal and advertising injury liability would safeguard you against liability resulting from particular offenses, such as your employee defaming a rival business in public. The factors covered under this aspect include false arrest, libel, slander, malicious prosecution, infringing copyright, wrongful eviction, or using another firm’s advertising data.
Commercial general liability insurance offers compensation for medical expenses, including payments for injury to a third party caused by an accident on your business premises or due to business operations or products. Medical payments compensation can be activated without any legal steps. This helps quick settlement of minor medical claims without legal complexities.
Workers’ Compensation Insurance
If you have staff members in your contracting company, your state laws may require you to carry a workers’ compensation insurance policy. This compensates you and your firm if workers get hurt or ill while on job.
A workers’ compensation policy can provide you with considerable security. It offers protection in case a worker files a lawsuit against your business on the basis of workplace injuries. Here are the major aspects covered by a workers’ compensation insurance policy:
As a general contractor, you may require workers’ compensation insurance to:
Live up to Contracts
Some firms need employees for them to buy their own insurance policy, such as worker’s compensation insurance. This limits the organization’s liability, and protects it from being held responsible if a contractor gets physically hurt at work.
Protect Against Medical Bills and Lost Wages
Even if you have a sound health insurance policy, it would be unable to account for job-related injuries, infections, or diseases. A worker’s compensation insurance policy compensates for your medical bills if you happen to get injured on the premises. It may also take into account the salaries lost due to sickness or injury.
Cover for Death
If an employee passes away, worker’s compensation insurance can take into account the funeral expenses and offer death benefits for surviving relatives, such as children or husband/wife. The benefits are estimated according to an employee’s weekly salary. It is usually a part of the worker’s salary at the time they passed away. A surviving spouse may get benefits until they remarry or die, while children may receive them until they turn 18.
Builder’s Risk Insurance
This insurance policy can cover the damage caused to a building under construction. It can pay for the expenses due to vandalism, fire, weather, or tool or equipment theft on the site.
While other insurance policies can protect construction tools and compensate for injuries and lawsuits, they do not pay for damage to an under-construction structure. This insurance policy caters to the distinguished risks posed by working on third party property. The benefits of builder’s risk insurance include:
Safeguards a building in progress
Protects construction materials
Satisfies client requirements
Here are the details of coverage offered by builder’s risk insurance:
Theft is a common occurrence at construction sites. They can run away with expensive items such as copper wires, which may cause you to bear additional expense of purchasing them again. Builder’s risk insurance offers coverage for stolen tools and equipment so that your time and money are saved.
Expense of restoring and cleaning fire damage is often more than the cost of the original construction. This insurance policy can compensate for the repairs or even a full rebuilding of a structure damaged by a catastrophe like fire.
In case a vandal defaces or destroys your construction work by destroying fixtures, spray painting, or breaking windows, this insurance policy can offer compensation. Builder’s risk insurance policy can offer financial support against vandalism so that your business can continue smoothly.
Weather changes are often not controllable even with the right precautions. This insurance policy can pay for damage to the building due to rain, windstorms, and other covered events. However, it usually does not include natural disasters such as floods, earthquakes, and tornadoes.
Conclusion You will never know what can happen in construction. It will always be risky and dangerous, but there is something you can do: have an extra layer of protection with contractor insurance.
NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact firstname.lastname@example.org
WRITTEN BY CHAMAN LAW FIRM TEAM
TEL: 08065553671, 08024230080