UNDERSTANDING INSURANCE FOR CONTRACTORS
is required […] to cover medical costs for workers who are injured on the job .”
A contractor will be dealing several types of insurance policies through their broker , including commercial general liability , worker ’ s compensation , automobile liability , contractor ’ s equipment floater , professional liability ( also known as errors and omissions ), builder ’ s risk , owner-controlled insurance program , and contractor controlled insurance program .
“ In the realm of standard insurance requirements , your commercial general liability […] will have limits that are stipulated by a project owner in a prime position or by a GC if you are working in a subcontracted position ,” said Miller . “ Limits as stipulated by the owner or GC are typically $ 1 million , or $ 2 million in the aggregate .” He noted that contractors can buy higher limits , but that the economics of buying higher limits need to be considered with the contractor ’ s insurance professional in relation to potential risk exposures .
Miller said that coverages under commercial general liability include bodily injury , third-party property damage , products / completed operations , personal / advertising injury , and medical payments .
“ The contractor ’ s equipment floater is essentially first-party protection for the equipment and tools that you own or lease ,” explained Miller . “ It covers that equipment at your normal domicile , shop , storage yard , and in the field . It ‘ floats ’ with the equipment on whatever site it ’ s on . These policies are typically written on a replacement cost basis as opposed to an actual cash value .”
The professional liability or errors and omissions might be driven by a contract you sign . It is needed for any form of construction management / consulting , and limits are dictated by the owner or prime consultant at no less than $ 1 million per occurrence . This professional liability is there to pay for your errors and omissions on your behalf should you make an error or omission in the design and / or engineering .
Builders risk insurance , Miller explained , is coverage for property damage to a structure under the course of construction including loss or damage to materials intended to be part of the building . The builder ’ s risk is sometimes covered by the owner / GC under a project blanket limit , and contractors can purchase a blanket policy to apply to all work throughout the policy period . It can also be project-specific coverage .
“ Read the contract to confirm who is responsible for procuring and who is responsible for the deductible ,” advised Miller . “ Take a close look at the contract to see what specific coverages are
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