5 Common Claims Every Contractor Should Know About
As a contractor, you have a lot to contend with especially when it comes to safeguarding your business. In an industry where there is ample opportunity for accidents that can lead to serious damages for you, your team, your clients and their properties, the plans provided by commercial insurance companies can provide contractors with the liability insurance needed to protect everything from people to equipment. We know it can be overwhelming to determine exactly what coverage is best for you. To give you an idea of where to begin, we’ve taken a look at some of the most common, and not so common, insurance claims.
1. Client Disputes
Let’s face it, no matter how good you are at your job, there’s always “that guy” who is going to say you didn’t do your job. You can take every step to make sure you meet the high standards of quality and overall objectives outlined on a project and still have someone claim you did not complete it as agreed. Contractor liability insurance can help provide you financial support when a dispute can’t be resolved, whether it is a missed deadline, questionable completion of a project or claims the quality of the work does not meet the standards of the client. When a client gets angry enough to dispute your services and you cannot seem to satisfy them, it could end up with a civil lawsuit. Your insurance will help to cover the costs both for the legal fees and the settlement costs that might present themselves.
Sometimes, issues can arise long after you have completed a job to a client’s satisfaction. This could be an issue with quality, such as sagging drywall, or it could be an injury that results from something you have installed. The right insurance coverage will protect you if something happens once you have completed the work.
Leaving your tools and equipment at a job site can open you up to some unexpected loss as often savvy thieves know they can steal your unattended contracting equipment. We don’t have to point out how expensive replacing equipment can be, and for most contractors preventing theft is top of mind. However, you don’t want to learn the hard way that theft is not just limited to break-ins at a job site. It can be your clients, team members or other tradespeople at a job site who have easy access to your tools.
You can be the most diligent contractor in the business, but it just takes one rogue elbow to break a window, or one misplaced toolbox to trip someone up on the job. There are just too many scenarios in which an accident can occur on a job site. This includes damage that can cause injuries to workers and clients or damage to property. These accidents can be honest, human error, but can also be caused by people working on the job site who are not properly trained, mishandle tools and materials or even work while under the influence of alcohol or drugs. Commercial general liability insurance is designed to cover damages if you are found legally responsible, and liable to cover the costs of damage to repair property, replace items or assist in the recovery of injuries.
4. Vehicle Accidents
This is separate from other accidents that can occur on the job site. Commercial auto insurance is a must, especially if you are using your own vehicle. There are so many scenarios in which your own vehicle can literally run into issues. It can be driving to and from a job site. It can be using your vehicle to drop something off at the job site such as equipment. It can be allowing an employee to use your vehicle to go to Home Depot to grab some nails or even make a coffee run. Without the proper coverage, an auto collision will leave you on the hook personally. Your personal auto insurance will probably cover damages if you are in an accident on your way to work, but if you have equipment in the vehicle that is damaged, this might not be covered. So, proper commercial insurance is important if you do any of these things. And remember, any vehicle that has advertising on it will not be covered by personal auto insurance.
5. Unforeseen Issues
Limiting risk for liability can be difficult as there can be so many unforeseen issues. For example, if you have recently decided to do your own designs when you usually work with a designer, all of a sudden anything related to design becomes your problem. This is another reason contractor insurance is your best friend. You will want to have the best coverage to avoid liability for things such as pollution as a result of an accident or improper handling of materials, or even flooding at a job site due to storms, melting snow or broken pipes. The right coverage can also be used in situations, such as equipment failure during a job, and other business interruptions that can cost money due to downtime.
The Right Insurance
Truly, the list can be endless but when dealing with commercial insurance companies, you should discuss your business and projects in detail to make sure you have the right coverage. The right contractor liability insurance will help you mitigate all the risks that could ruin your business while personal liability insurance protects you if someone decides to sue you personally as a result of damages caused by your company. This is a very real possibility if they find your business was negligent and caused injury or damages. By having a personal liability insurance plan, you can cover legal costs and settlement payments. It is well worth the investment to have personal coverage as the costs of a civil suit can be devastating.
To learn more about contractor liability insurance and professional liability insurance, contact W.B. White Insurance here.
Derek began his insurance career in 2006. He is actively involved in various Not For Profit community programs in Durham Region. Derek’s hands on experience has made him an expert advisor in Director and Officers Liability and Professional Liability. Derek is also a contributor to Imagine Canada’s Insurance and Non-Profit Resource Centre.
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