In a span of few years, commercial insurance coverage has become the most fundamental tool for small construction contractors to mitigate risks related to construction projects. After all, there is more than one risk small construction contractors have to bear on site.
In fact, construction contractors should work side-by-side with insurance providers on each construction job to determine potential losses. Choosing commercial insurance beforehand offers complete coverage to small construction contractors to mitigate risks on various construction jobs.
What Makes Commercial Insurance So Important for Small Construction Contractors?
If you operate as a small construction contractor, there is a good chance you’ve already had experience with commercial insurance. Whether it’s general liability or workers’ compensation, commercial insurance serves its purpose and works in favor of small construction contractors who often get exposed to a wide range of risks.
In some cases, companies mandate commercial insurance coverage through subcontracting. Over time, commercial insurance has become even more relevant. It is also mandatory to get commercial insurance coverage to avail construction license from most construction boards.
Modern Construction Projects Require More Protection
In today’s construction projects, not all small contractors have the same commercial insurance coverage. It means small construction contractors should realize the unique operations and requirements of their business. If you are a roofer, you are more likely to get higher limits than a handyman will. Even though both Roofer Insurance and Handyman Insurance include General Liability coverage, their coverage is crafted differently depending on the exposure and risks involved in each job and therefore premiums vary widely.
After that, you can opt for the insurance policy that would mitigate the most risks and offer optimal protection. It is vital to contextualize the fundamentals of what you have right now and what you may possess in the foreseeable future. It will help you secure a broader commercial insurance coverage.
The most common coverage option for small construction contractors involves commercial general liability insurance. Of course, it is not the only coverage option in commercial insurance, but it is arguably the essential option for small construction contractors in the U.S.
What is a Commercial General Liability Insurance?
Commercial insurance often refers to CGL or commercial general liability insurance. Typically, it is the top and the most standard choice for small construction contractors to seek.
For starters, commercial general liability insurance creates excellent foundational coverage support for small contractors and workers.
A typical CGL coverage is more than enough to take care of GL claims associated with property damage and third-party body injuries.
As a small construction contractor, it is normal to leave out series of gaps throughout the CGL coverage. But small construction contractors should all the more take into account the nature of its risks and prepare for when claims arise because a single claim can hugely impact the financial health and sustainability of the business.
The Relevance of CGL in 2021 and Beyond
When it comes to small construction contractors, commercial insurance like general liability is quintessential. In fact, wise and experienced construction contractors can’t imagine working without commercial insurance coverage.
The policy serves as a safety mechanism for small construction contractors and workers who operate under high risk on construction sites. Even the management of on-site construction comes with several risks that can lead to third-party injuries or direct property damage.
The Last Words
Most business owners believe that the smaller their operations are the less likely they’re required to obtain commercial insurances. Truth is that small businesses are less likely to survive and recover from a huge loss. Based on the recent small business majority survey on August 2020, 26% of small business owners will not survive past the next three months and 16% have considered bankruptcy in the wake of the pandemic. Especially during unforeseeable circumstances, obtaining small business insurance should be the topmost priority in start-ups, not only to protect your resources but also to prepare for the worst and thrive with sustainability.