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Do I Need Construction Liability Insurance?

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Owning and operating a construction business is often exciting, challenging and rewarding.  It also comes with responsibility and accountability.  Every contractor normally strives for the performing at a high level for their customers.  Still, a client may think you under delivered or even wronged them in some way.  In the event this happens, is your business protected with construction liability insurance?

Many contractors today are stilled formed as a sole proprietorship or a partnership.  These types of business owners put not only their business, but their personal assets at risk as well.  A construction liability policy will help protect you and your business and  against financial disaster.

Even if you formed an LLC or limited liability corporation or incorporated, it’s possible to be held liable as the owner of the contracting business.  Signing a personal guarantee or operating irresponsibly is just a couple of potential problems.  Have a meeting with your corporate attorney and licensed insurance agent to review this based on your construction business and the type of work you engage.

Construction liability will protect against lawsuits, property damage or personal injury to a third party.  It will pay for legal fees, settlements and judgments subject to the deductible. 

There are several types of liability insurance available to the contractor.  The first is a general liability policy.  This is generally the main coverage needed to protect a construction business and its owner(s).  Some professions may also need to supplement this coverage with a professional liability policy if your business performs design or engineering services. 

Also known as E & O or errors and omissions, this will protect against malpractice and negligence. 

Sitting down with a licensed insurance professional and reviewing the construction liability coverage in place is being responsible to yourself and your business.  At least annually, discuss project changes, revenues, and keep your insurance professional informed, and your construction liability coverage up to date.