Three Reasons Why Contractors Need General Liability Insurance

Contractors Need General Liability Insurance
  • Author: Mohsin Khan
  • Posted On: June 8, 2022
  • Updated On: July 11, 2023

Contractors are people who work in various forms of DIY for a living, like decorators, plumbers, and carpenters. They can be sole traders or a part of a small business. Still, every contractor should invest in good quality general liability insurance regardless of status.

 Contractors Need General Liability Insurance

If you work without it, you leave yourself open to many risks and potential expenses if something terrible happens as a result of or during your job. So let’s look at the three main reasons you need to take out liability insurance coverage as a contractor.

Protection from Claims Against You

Firstly, insurance can shield you from any claims that might be brought against you. Accidents and mistakes happen; it’s a part of the package in any workspace.

However, given the nature of the work, a mistake on a contractor’s job can potentially cause a lot of damage or personal injury both to yourself and to people around the job site.

Without insurance, a claim brought against a sole trader or a business can cost so much money that it makes you involuntarily redundant. You lose work while you fight it, and it could cost so much money that you cannot afford to keep the rest of your business afloat synonymously.

Support with Potential Legal Costs

Another thing general liability insurance for contractors protects you against is any legal costs that may arise as a result of a claim. This is another cost that can floor any business or independent trader as legal fees are notoriously high regardless of the outcome.

So, by investing in insurance instead, you are saving money should a problem arise and you need to use it. Given that the claim itself might already be for an astronomical amount, especially if it is down to property damage or personal injury and therefore lost wages, it’s worth looking into.

Protection from Your Employees

This is a topic that contractors might not like to think about, but sometimes your employees might suffer an injury on a job site. Who is responsible? Well, you are.

If you contracted the job, then, unfortunately, you are liable to pay any medical bills, lost wages, and injury recovery costs that may occur as a result of the accident.

Without insurance, you will not only lose an employee, but you will also lose double the money paying wages to someone who isn’t working while also paying the replacement worker’s wages. All of this can be avoided if you have the right safeguarding precautions in place beforehand.

These are just three of the core reasons why a contractor needs liability coverage. Not only are you protecting your assets, but also those of your business.

This also keeps you safe from any potential claims from clients as well as any from employees as well, should the need ever arise. Regardless of where you work and how you work, it would help if you kept yourself safe from financial repercussions that can occur on the job.

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Author: Mohsin Khan

Mohsin has worked as one of the experienced editors with ConstructionHow since 2020 with a total span of 5 years of experience in business PR, boasting a remarkable professional trajectory, he has collaborated with entrepreneurs and startups, and certain publications over the last few years. His unwavering interest lies in the construction industry and related materials. He believes in creating functional and aesthetically pleasing buildings, and homes that fall under the right budget. With a wide range of experience in construction, he also tapped into DIY and home improvement projects based on his extensive set of knowledge in the industry.