Does Contractors Insurance Cover Liability?

Contractors insurance is an umbrella term for policies geared specifically to cover the dangers faced by contractors. Most of these policies come with multiple forms of liability in case of lawsuits filed against the business or individual contractor. 

General Liability 

General liability insurance is one of the more basic and common liability coverages because it is so important. This insurance covers common claims concerning: 

• Bodily Injury: Bodily injury liability covers medical bills a third party may suffer as a result of the contractor’s work. For example, if a client trips and falls on a piece of the contractor’s equipment, this insurance can help pay for their medical bills and protect the contractor in case of a related lawsuit. 

• Property Damage: Property damage liability covers damages to a third party’s physical property caused by a result of the contractor’s everyday activities. 

• Personal and Advertising Injury: Personal and advertising injury covers claims against the contractor concerning libel, slander, copyright infringement, theft of an advertising idea and more.

Professional Liability 

Professional liability insurance covers professional negligence, which concerns the professional services offered by the contractor. Where general liability covers general accidents, professional liability specifically covers accidents related to the service the contractor provides. For example, if a contractor makes a mistake that causes the client to have to pay for repairs, professional liability insurance can cover the damages and related lawsuit. 

Workers Compensation 

Workers compensation protects your employees and subcontractors in case they are injured on the job. If one of your employees is hurt while working, workers compensation insurance can help pay for their medical bills, wages, disability benefits and more. This insurance is especially important for contractors who deal with heavy or dangerous equipment. 

Commercial Auto Insurance Liability 

Commercial auto insurance covers vehicles owned or used by a business for work purposes. One of the coverages available under commercial auto insurance is liability. If you are driving a truck to your client’s home and cause an accident, liability insurance can cover the injuries and damages you may cause to someone else on the road. Liability insurance is required for all vehicles both personal and commercial, although minimum requirements vary by state. 

In Maryland, all vehicles must carry at least: 

• $30,000 in bodily injury liability per person 

• $60,000 in bodily injury liability per accident 

• $15,000 in property damage liability 

• $30,000/$60,0000 in uninsured motorist coverage per person/per accident

Be sure to speak with an insurance agent about how much coverage your contracting business needs to protect against accidents and lawsuits.