California Contractors Insurance Agents In LA Know Why A General Liability Policy Is Necessary

By Charles Leach

Getting into the construction business requires more than a talent for building and a good set of tools. You will have to get licensed and show proof of bonds and insurance. It may be tempting to skimp on your coverage because of the expense. This is always a mistake. If something unexpected happens, you will be held liable. This can have catastrophic consequences. That's why California Contractors Insurance Agents In LA always advise their clients to take out, and keep current, a good general liability policy.

Accidents are common in the construction business. If you have a liability policy you'll be covered if one of your workers gets hurt on the job. If the property you are working on is damaged, you have coverage. Depending on the terms of your policy, you can be protected years after a project is completed, if your coverage was in place at the time of the incident. Many customers want to see proof of liability insurance before they will hire a contractor.

The cost of a policy varies according to the region of the country in which the contractor is working, payroll, the cost of subcontractors, and receipts. A contractor working on his own will pay anywhere from eight hundred to thirteen hundred dollars a year. A contractor with a payroll of a hundred thousand or more will pay two thousand plus dollars each year.

The cost of monthly premiums will vary as well. You might get discounted rates if you haven't filed a claim recently for instance. Experience and credit ratings are factored in. Your deductible, and other types of policies you have, can also affect the monthly cost.

General liability will cover a number of instances. That includes illness, injury, and death. Damage to property is included. If the property involved is damaged to the point there is loss of use, you are covered.

You will be covered if someone claims injury, illness, or property damage, after a project is completed. If you are accused of copyright infringement or publish material that slanders or libels another individual, the policy will cover that. This is not something most contractors will have need of.

There are two basic types of general liability policies. You can buy an occurrence policy that will cover claims made at any time as long as the policy was in place when the event happened. With this policy, when the claim was filed doesn't matter. In most instances a claim can be made up to ten years after a project was completed and still be covered by a policy. A claims made policy covers an event only if the event and the subsequent claim occurred during the time the policy was in place.

Insurance companies reserve the right to conduct premium audits. They will usually check if the information a contractor put on his application and the actual scope of the work the contractor is doing show discrepancies. Audits are normally conducted to make sure the insurer is not facing more exposure than was anticipated when the policy was issued. Audits can be conducted as soon as ten days after a policy is put in place.

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