Do you need contractor liability insurance? You may not know that you are required to carry it, and having that kind of uncertainty is a problem. Unfortunately, the current legal system makes it difficult to understand what the laws are and what is required clearly.

If you want to find out whether you need it and what you are covered, reading this article will help you get the answers you need. Keep in mind that this isn’t legal advice, and you should contact a lawyer to confirm any important details.

Understanding the Need for Insurance

First of all, when it comes California contractor’s general liability insurance you have to know what it covers. It’s an insurance policy that will cover you from any legal claims you may be made because of your negligence. This is important in the construction industry, especially if you are working on a small home project or planning to build a commercial building.

If you think you don’t need it, but you are unsure why you do, then there are a few reasons to be aware of why it is essential to have the right amount of insurance. First of all, it is cheaper to have insurance than it would be to take on a contractor and pay him or her for the repairs you have to make. This cost savings is significant if the repairs are extensive and are costly. A lot of the time, insurance will cover everything that is required.

Additionally, you don’t want to take on the risk of having to pay for a claim out of your pocket because you didn’t have contractor liability insurance. It’s better to have insurance that covers you and your business when things go wrong and to have to foot the costs yourself. In addition to this, you have to remember that if you plan to hire workers and get a subcontractor to help you out, you will need this insurance.

Additional Liability Considerations

Keep in mind that it’s essential to consider that there is liability insurance you will need to cover all of your employees if something goes wrong. In most cases, this will protect you, but it may need to be more tailored to the situation if dealing with a smaller company. If you have a large business, however, then you will need an even more complete coverage plan.

It is essential to look around when looking for contractor liability insurance to make sure you get the best deal for your needs. Many companies offer you insurance plans to suit your needs so you can protect your business and your family.

So before you decide you need this type of insurance, ask yourself, is contractor liability insurance necessary and what level of coverage you need.

If you are operating as an LLC in California you will also be required to carry a $100,000 LLC employee worker bond as well. Research the State requirements for your location to be in compliance with local and state law.

Possibilities With Certain Types of Coverage

Is contractor liability insurance required for your home or office? If you own a home, you will probably need more than just general liability insurance. You will need to have coverage for liability and the like with any contractor. The reason is that your home is a large place that attracts people, and sometimes contractors slip and fall and hurt themselves.

If you have a workspace at your home, then you will also need some form of this coverage. This will generally include liability for accidents at your home, how long the work will continue, and how much work can be done in the workspace. Without any danger. If your business is in any other part of the city or town, then it may not be as important as you might not need this.

However, if you operate a small business, say you may need additional coverage to cover repairs in the event of a significant incident. You may find that if you only get a single incident covered, then this may not be enough, but if you had to pay for repairs to a lot of different buildings and things like roofs or fences, you might need this.

In Conclusion

You need to think about if the state you are working in requires this type of insurance and what level is required. Often it is necessary for some states to be carried by all contractors. This type of coverage may also need to be mandatory, and you will need to check with your state’s law and make sure.

Under California state law, all contractors to purchase a license bond. Maintaining a minimum of a $15,000 bond is required to be a licensed contractor in California, these bonds are held by the CSLB(Contractors State License Board).

This is one of the primary conditions you need to meet to keep an active license. They hold these bonds to protect from people being financially harmed because of a contractor’s work. While California’s state retains the right to increase the amount of the bond needed periodically, it stands at $15,000.

It’s essential to recognize the difference between a contractor’s bond and insurance. The State of California completely indemnifies all licensed bonds that they hold for contractors. This means on receipt of a successful claim payment will be made from the bond, instead of having to wait on payment from a contractor. This does not relieve the contractor of the responsibility for paying the debt. It still holds them accountable for the surety repayments, and they outlined this in the terms and conditions of the bond indemnity agreement.