The global usage-based insurance market is expected to reach $43 billion by the end of 2030. One popular form of insurance is general liability insurance.

But, is general liability insurance right for you? This short guide will give you the ins and outs of general liability insurance and its benefits.

What Is General Liability?

Accidents can happen even if you’re running a low-risk small business. This can include damage to the property or a slip-and-fall injury, with someone breaking their wrist, etc. Commercial general liability covers businesses when they are confronted with any of these general coverage issues.

This injury can also happen with contract workers who are building, replacing, or setting something up in someone else’s home. It’s important to understand how contractors enter into this liability deal to protect themselves from being held liable for damages or injuries.

Commercial General Liability

Whenever someone enters into a contract with a general contractor or developer, there is a requirement to evidence their insurance. It’s one of the first requests when building a contract.

This involves the employer and employee checking either party’s insurance details to ensure their liability plans. If it is not present, there is a legal standard allowing the party to withdrawal payment.

Coverage Options

Among the coverage options, most employers are looking for commercial general liability. This is a general coverage option that most contractors have a requirement to carry.

In addition, other coverage options include worker’s compensation insurance and commercial auto insurance. You may also need to have a bond and builder’s risk policy as well. This is all dependent upon the contract that is built between the two parties.

How Does It Work?

When you get a liability policy, you can evidence that policy to a general contractor or developer. This involves providing a certificate of insurance to whoever you are working with during this process.

This certificate lists your coverage details. This includes the effective dates, coverage limits, and the policy term in detail from the insurance carrier. Providing that certificate of insurance to the other entity can allow the project to commence.

Coverage Policies

A contractor’s liability insurance is sometimes tough to achieve. Construction defect claims can put a halt to this process. Some insurance carriers will add exclusions to your policy.

These exclusions are rules that carriers enforce when presenting a policy. So make sure you understand these specific exclusions that may prevent coverage before embarking on your project. Check your local state law to find out more about these exclusions in your contractor’s insurance.

General Liability

Consult with your agent and have them review the contract to ensure it is meeting the requirements. They can let you know the crucial aspects of the contract before entering the build phase.

Navigating through your policy with your broker can help with these adjustments. Double-checking with your agent and checking your local state law is a must before beginning your work.

Follow our blog for more information on general liability insurance and how to protect your work!