3 Clear Reasons Contractors Need General Liability Insurance

We live in a world of risk management, and one of the obvious ways we do that is by adequately ensuring what is valuable or meaningful to us.


We have home contents insurance for all the advanced, expensive and widescreen tech we own, the rare Rembrandts in the study (of course), and the little black velvet pouches stuffed with diamonds we keep in our houses; we have pet insurance for man’s and woman’s best friends; our partners have life insurance to cover… well, us. And, if we’re legendary, virtuoso concert pianists, renowned the world over, we’ve probably got our pinkies insured too.


If it’s valuable or meaningful, its loss needs to be financially covered with an insurance policy. It’s common sense.


If you’re a general contractor, you understand that there are risks associated with carrying out your work and fulfilling your contract with a client. You also understand that it’s vital for your business to maintain safety standards and your hard-earned reputation. That’s where general liability insurance comes in.


Accidents do happen, mistakes are made, clients get hit on the head by falling materials, and, yes, even fires break out occasionally – all of these unexpected occurrences happen every day – somewhere.


What it all comes down to in the end, however, is that you, as “the head honcho” – you are the one who is going to have to put things right when things do go wrong and that invariably means putting your hand in your pocket to see how much cash you have spare. Unless, of course, you are already covered…


General liability insurance, which covers you for a whole host of potential, yet usually unexpected expenses, makes both financial and business sense, especially if you’re just starting out as a fledgling company, or your contractor business is now starting to grow and expand as you’d hoped. Furthermore, in the majority of U.S. states, it’s a legal requirement for your registration and permits.


Here are your “3 Clear Reasons Contractors Need General Liability Insurance,” and that most certainly includes you…


1. Legal / Court Expenses

In this economy-conscious world in which we live, money talks – literally. And this often leads to legal action being taken. Whether it’s because a client claims you infringed the terms of a contract, or another client claims physical injury while present on one of your work sites, it means the same – legal costs.


General liability insurance will protect you from the type of clients who are looking to reduce the overall net cost of a contract by covering expenses and limiting potential payouts. Court proceedings can affect your business’s operation, delay projects, and can even significantly damage your finances to the point of bankruptcy (and that’s not an exaggeration – it happens).


2. Cyber Crime: The New Threat to Business

Regardless of your type of business – construction or other – there is a new threat in town. Cybercrime. You may well have read about it, and thought to yourself that it would never affect you.  Weel, with databases being hacked and data being stolen, that affects everyone – individually, and businesses – large and small.


If your records are kept in a digital form, you’re at risk – the same risk as a multinational through to a neighborhood corner food store. Digital data, especially the confidential or financial kind, is the new form of printable money for cybercriminals, and without the right security, yours may be at risk.


Examples of cybercrime include:


  • Fraud and identity theft (using malware, hacking or phishing*)
  • Phishing* scams – a method that cybercriminals use to deceive you, and make you disclose personal information, eg. passwords, credit card information or social security and bank account numbers, among others.
  • Spam
  • Propagation of illegal obscene or offensive content, including harassment and threats


3. Property Damage

General liability insurance covers you for any accidental damage to a client’s property or a third party property. For example, if you are repairing an unstable chimney on a property, it collapses, and the ensuing debris hits an adjacent property, causing a degree of damage.


In addition, as a company, you may rent offices or storage space for building materials. Should a rented property be accidentally damaged, eg. an overnight electrical fire, your insurance will cover you.


General Liabilities Covered

General liability insurance covers a range of issues that can happen through no fault of a business, including these examples given here:


  • Legal / Court Expenses
  • Cyber Crime
  • Property Damage


What would you consider are the primary benefits of general liability insurance, not including the obvious peace of mind it provides those covered? Drop a comment below – thank you.

Ellen Hollington

Ellen Hollington is a freelance writer who offers to ghostwrite, copywriting, and blogging services. She works closely with B2C and B2B businesses providing digital marketing content that gains social media attention and increases their search engine visibility.