Contractors are well aware of the need for worker’s comp and general liability insurances. In fact, they must have these types of coverage to obtain a state license. However, not all claims are related to bodily injury, property damage, or workplace accidents. Most projects come with agreements outlining costs and completion dates, and violation of the agreements could be considered contract breaches. In these claims, professional liability insurance can pay court costs and judgments. Below are a few of the most common types of claims filed against contractors.
Design and Build
For many projects, the contractor may handle the phases of design and construction. If for any reason, the design and build portion of the project is deficient, general liability insurance won’t cover it. Only a professional liability policy will do. Most general liability Contractors Insurance specifically excludes professional services coverage.
Regulatory Errors
In most jurisdictions, contractors are responsible for obtaining the necessary permits for construction projects. Failure to get the right permits could result in delayed construction and, in extreme cases, having to start the project all over because inspectors rejected the first attempt.
Subcontractors
Hiring a subcontractor increases a company’s liability, as does responsibility for payment approval. Interfering with a subcontractor’s work can create additional liability, particularly if the subcontractor is called in to address sudden issues affecting the completion schedule.
Construction Management
Accepting a specialist’s responsibilities or advertising as a project management expert moves firms into a consultant’s role and, as such, the firm’s professional liability is increased.
Delays
All contractors face issues that can cause project delays. Although considered typical in the industry, if a delay results in financial losses to the client, reimbursement may be sought through legal action. In these cases, only professional liability coverage can pay the damages.
Any general or subcontractor in today’s litigious world should consider protecting themselves and their companies with professional liability insurance that covers the company against claims arising from professional failures. Every action filed against a firm requires a skilled attorney’s response, and with the right Contractors Insurance, a company can depend on website to respond vigorously on its behalf.
