How Does Contractors' General Liability Insurance Work?
Contractors never know from day to day what might happen on a job site. A support structure could give and cause an accident or a pipe breaks and an employee is injured. To cover a contractor in the event of mistakes or damages, general liability insurance should be purchased. This protects the contractor from accidents involving customers, bystanders and employees. Learn how contractors' general liability insurance works.
Purchasing Liability Insurance
Purchase liability insurance to protect yourself as well as others around you that can have an accident on a job site. Almost all of the 50 states require liability insurance for you to work in construction. In addition, many firms will not hire you for a construction job unless you show certification of insurance. Consequently, you are better off to buy it, get the coverage and future jobs. Purchasing this insurance before starting a new contracting job assures you that everything is in place ahead of time and their should be no last minute concerns with the hiring company.
Accidents
Understand that you must be current on your insurance premiums to be covered in an accident. Most insurance companies offer yearly or monthly premiums.
File a claim with your insurance agent right after any type of on-the-job incident or accident. It does not matter if the incident involves you, employees or people in the area. Your agent will have you file a claim and an investigation will follow. You must supply the agent with any pertinent information about the situation including contact information for victims, police reports, hospital records and eyewitnesses.
Insurance Investigation
Expect to meet with the claim adjuster who will review the case, document information and conduct interviews with witnesses. After completing the investigation a report is submitted to the legal department of the insurance company.
Legal Findings
The legal department conducts reviews. The legal department also determines if repairs, hospital bills, damages and legal fees will be paid or not paid. Deciding whether a claim will be paid is usually based on who was at fault. Normally if the accident involving the contractor is covered in the policy, the contractor expenses will be paid. However, depending upon unusual circumstances it is possible the claim could be denied.
Appeals can occur when the insurance company denies claims. Some cases can result in lawsuits between the insurance company and a contractor.