Contractor General Liability Insurance Requirements

Contractors need general liability insurance to operate responsibly within their given state or county. Each state may have different requirements depending on the type of work being performed. The proper coverage will protect contractors when there is a mistake or accident.

Types Of Contractor Insurance

There are many levels of insurance a general contractor may choose from. General liability is basically an umbrella insurance policy which will pay for damages or accidents caused by the company during a project. Workers comp is an insurance coverage provided for the employee in case an accident caused physical harm or loss of work. Some companies will not hire a contractor who does not have proof of workers comp and a general liability policy. In some cases a contractors automobile liability policy will also be required.

Insurance Amount

The amount of general liability insurance that is required really depends on the company or individual who is hiring the contractor. If a contractor is planning on performing work for the city or county, the office which is taking bids can inform them of insurance requirements. Contractors should avoid going with the bare minimum coverage as the protection supplied by this type of policy is generally not adequate for most jobs. A licensed business insurance agent can give a contractor advice on what is a typical amount of general liability insurance needed for the type of work they will be doing. Find out what competing companies have for insurance and match them. This is a good way to be safe and avoid missing out on potential contracts.