With the construction industry’s value dropping from $11, 217 billion to $10,566 billion between 2019 and 2020, things haven’t been looking good for contractors, have they? And now there’s the economic implications of the pandemic.
Well, what if I told you there is a way to attract more customers in 2021?
It’s pretty simple actually – get some insurance, general liability at the least. But it seems like some finance mumbo jumbo, huh? Well, don’t worry about it; here is a step by step guide on purchasing a General Contractor liability insurance policy.
4 Essential tips for choosing Contractor Insurance
1. Choose an insurance company with a high rating
Many people may not know this, but insurance companies usually have ratings. Here in the United States, there are just a few companies that are authorized to give these ratings; AM Best, Standard & Poor’s, Fitch, and Moody’s. For your own sake, you should steer clear of insurance companies that are either unrated or have a rating of below a B.
A low rating is usually an indication of a low financial standing and a high risk of unpaid claims. As such, if you buy any contractors insurance policy from a company like this, your contractors and clients can reject your certificate and require you to get another policy elsewhere.
More importantly, your insurance company can suddenly go bankrupt and leave you with neither insurance nor a refund, quite a disaster indeed.
Fortunately, there are just so many A-rated insurance companies out there that you don’t have to settle for less. To get a quick list of top-rated providers, here’s the list of top contractors liability insurance.
2. Go for an admitted insurance company
Simply put, an admitted company is backed by the state and must follow the insurance laws it has laid out. Also, when an admitted company goes bankrupt, other admitted companies come to the rescue. So as long as you’ve paid for your General Contractor liability insurance policy, you’re covered no matter what happens.
On the other hand, if you opt for a non-admitted company, there are some risks involved, even if it’s highly rated. But by far the most dangerous group of companies to work with are those in the risk retention group. These companies don’t need to follow any policy language rules and even have a maximum amount they can pay out every year.
3. Always choose an ISO contractors insurance policy
ISO policies are standard policies that are considered to be fair for both the client and the insurer while manuscript policies leave all the language and exclusion power to the insurance companies. Fortunately, manuscript policies are mostly a preference of non-admitted companies and are usually cheap.
4. Choose a 1M/2M General Contractor liability insurance policy
When buying contractors insurance for the first time, a $1M/$2M policy is a good place to start. Its $1M single-claim limit and $2M policy period limit are usually more than enough for most contractors. Also, given that such a policy usually costs less than $1000 per year, it is quite affordable. To get a more accurate quote in less than 3 minutes for General Contractors Liability Insurance, check out Contractorsliability.com.
Best buy General Contractor insurance
So now you know what to look out for when buying your General Contractor liability insurance. Follow these 4 essential tips and you won’t go wrong!