Does General Liability Insurance Cover Workmanship?

General liability insurance covers accidents, injuries, and damages while the contractor works. His liability insurance will pay for any medical costs if he is hurt or if one of your family members is injured due to his deeds. The expense of repairing your driveway is covered if his equipment causes damage to it. His insurance will also assist in covering any associated legal and court costs.

General liability insurance is more concerned with what happens while the contractor is on your property than with the finished product. An insurance policy for general liability might cover the following circumstances:

Property damage brought on by the contractor or his team could include harm to your well or septic system if a contractor drives heavy equipment over it, harm to your home's structure if a subcontractor crashes a piece of equipment into an exterior wall, or harm to walls and flooring if the contractor neglects to protect them while renovating. Damages might be paid if a contractor's employee or the contractor himself causes damage to your property while working on your house.

Personal injury: General liability may provide coverage if the contractor's work results in injuries to you, your family, or other visitors to your property. General responsibility may pay for the medical costs if you trip over a board or if a guest neighbor falls through a stair that isn't securely tied down.

How Is Contractor General Liability Insurance Calculated?

General liability insurance for contractors is often calculated using three different factors:

• The Insurance Service Offices classify firms by assigning them to the same categories or class codes. Example class code: Aluminum Awning Erection and Drivers Due to the identical risks that the employees confront and the potential for similar claims. Other organizations that perform the same type of service may be included under the same code.

• Rates: Depending on the level of coverage selected, different rates are allocated to each class code. Additionally, these rates may differ from one state to another and from one insurance to another.

• Exposure Base: This is frequently determined based on anticipated revenue or sales.

The combination of these three criteria produces the contractor's premium. There are additional factors at play. The cost of the premium will vary depending on the scope of the policy and the contractor purchasing the insurance. Contractors or businesses that have filed prior accident claims will be charged more. Additionally, contractors that work in physically demanding or riskier environments will be paid extra. For instance, a roofing contractor will probably pay a more significant premium than a builder who keeps his feet on the ground.

How Much Does Contractor General Liability Insurance Cost?

For coverage ranging from $500,000 to $2 million, general liability insurance for contractors typically costs between $700 and $1,200 annually. Prices vary by state, the contractor's area of expertise, and other factors, including the contractor's history of accidents or claims. To make the coverage more reasonable, payments are dispersed over the year.