Insurance
A Deep Dive Into Business Owners Policy Exclusions to Avoid Surprises
January 27, 2025
| January 21, 2025
Author: KimberleeEdited by: Kimberlee and Reviewed: Kimberlee
General liability insurance may not always be required, but it is an important insurance policy for contractors to get. It pays for the costs of medical bills or damages incurred when a third party has an accident on your property or place of work. This article will cover the key features of general liability insurance and go over the factors when choosing a carrier. Keep in mind that some contractors get general liability insurance in a business owners policy that combines the coverage with commercial property coverage.
Let’s look at the key features of commercial general liability insurance.
There are three types of coverage in commercial general liability:
Policies may start with limits as low as $100,000 in coverage. Most contractors will take out policies for at least $1 million in coverage to ensure they have enough to cover claims that can happen on the job.
A deductible may apply to the business. The deductible is your portion of the claim. The higher the deductible, the lower the premium, which can help save independent contractors money.
There are some key benefits to having commercial general liability insurance:
Independent contractors face risks every time they take on a job. The nature of working with tools and equipment increases the risk that someone will get hurt. For example, someone may accidentally trigger a nail gun, leading to an injury. This would be paid by general liability insurance. Likewise, if the contractor damages property, this would be covered.
Here’s what you need to know about choosing the right policy.
Work with an agent to identify your business’s risks and determine the amount of coverage you need to be fully protected (for you and independent contractors). Risk is determined by how many jobs you take on annually, the revenues you generate, and the types of jobs they are.
Once you have an idea of what you need for your business, shop for a policy among top insurance carriers. The best carriers have a strong AM Best rating and a reputation for handling claims fairly.
Once you have found a carrier you are comfortable with, discuss any customizations that they may offer to make sure the policy meets your business needs.
Several factors affect the cost of a commercial general liability insurance policy:
When you get any insurance policy, set a plan to review it at least once per year. You may require independent contractors under you to get a policy as well. If you have any significant business changes, you will also want to review the policy coverages and limitations. Report claims quickly to ensure they are covered properly and work with the insurance carrier to fight any false claims. Talk to your agent about any amendments or endorsements that may apply to your business to customize the policy and ensure it is tailored to your needs.
Check with your local licensing body to see if general liability insurance is required for your business. Shop among top carriers to get a policy that fits your business risk profile and covers you from accidents on the job.
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