What You Need to Know About Insurance Requirements for Building Contractors

Building contractors are obligated to procure a set of insurances to proceed with any tasks or projects approved by owners. All insurances are subject to approval with the given state's policies and guidelines for the site of construction. Keep in mind that construction insurance requirements are not all the same. The requirements vary from one state to another. It also depends on the specificity of your profession. 

Insurance requirements for contractors

If you are working in the construction industry, there are times that a contractor's insurance is a legal obligation. There are four main types of insurance that you are legally required to have before working or starting any projects. Each type of insurance covers its form of liability. If you lack at least one or two of the listed insurances below, not only are you risking your credibility but your safety as well. 

General liability insurance 

Any contractor that is licensed or is a professional at their work has commercial general insurance (CGL). If you are a reputable or reliable building contractor, then you can't start any building construction projects without securing a CGL. This insurance will cover you from any forms of accidents that may occur on-site. These include any kinds of injuries that you had sustained and accidents leading to damage of property and goods. It's a form of protection for contractors, and it ensures their safety in the construction site. 

Worker's compensation insurance

This type of insurance is similar to the CGL, but it covers your workers' well-being instead. The insurance covers you in case of any events that a worker is injured due to an accident. If such construction accidents do occur, the policy of the insurance guarantees that it will be used to pay off your worker's assigned wages or medical charges. It will protect you from any lawsuit or from being sued. If you are a stand-alone operation and don't have any employees, then this type of insurance is usually not required.

Property insurance

Property insurance covers the cost of damages that the building you are constructing had sustained. It is an important insurance to have because most owners will turn down contractors that haven't secured  property insurance. How will they be invested with your company, if you can't even pay off the damages that a natural event had caused? The insurance isn't limited to the building that is under construction. It also includes fixtures, materials, and equipment used for the construction. 

Automobile insurance

It is still essential to keep this type of insurance in mind. If ever your construction firm has employed drivers for construction vehicles or transport, then this insurance covers the maintenance fees for any damages that the vehicle had sustained. Also, ensure if the insurance they have is up-to-date.

There are also optional insurances that you can procure with your state safety departments. But the four listed above are the ones that you will need for any construction project. Owners will always see to it if their contractors have the necessary documents and paper works to be working on the job.