What is insurance?
Insurance refers a way of protection from different types of losses. The person or company which provides insurance is known as the insurer while the person who is protected by the insurance is called the insured. The contract between the insurer and the insured is called the insurance policy. Liability insurance is a type of insurance that protects the insured against liabilities brought about by either lawsuits or similar cases. It protects everyone concerned if there is an accident on a building site. For contractors, despite putting in place all the necessary precautions, there is always a risk of damage, either to a building or even a third person in their projects.
Protecting Your Business
A liability policy or insurance will protect a contractors business. Lawsuits tend to be very much financially draining. It is the purpose of a liability insurance to ensure that in case of any claims against the insured contractor, he or she is not financially responsible for compensation. Liability insurance will also protect a contractor in case in the course of construction, another contractor is affected. This can happen in different ways even through injuries to workers associated with another contractor. Liability insurance covers any losses and expenses that may arise in case the affected contractor files a lawsuit.
Minimizing Risk
Construction involves a lot of risks to the workers and builders. Construction sites can be dangerous places no matter how many precautions that you take. When a worker is injured or even killed on the job, liability insurance kicks in to offset the financial portion of the accident. Nobody wants accidents to happen, nonetheless they do and liability insurance is there to protect the contractor and everyone else when they do.
Most construction clients know the risks involved in construction and most of the times they require their contractors to have with them proof of liability insurance cover before any construction contracts are awarded
It is not just recommended that you have liability insurance in fact it is a law for a contractor to a liability insurance coverage. This is especially true for contractors who work for, in or with the government on any of their projects and it protects them from losses from lawsuits involving either the public or even the government itself.
It is therefore very advisable for every contractor to ensure that they have a liability insurance coverage no matter what small your company may be.
