Entrepreneurs have enough items to juggle without adding insurance to the mix; however, insurance-related issues are often unavoidable and in some cases misunderstood. Sure, it's easy to determine how much coverage is needed for tools and equipment and it's usually not a big deal to get insurance for vehicles and trailers that are connected to your business.
But with liability insurance? Is general liability insurance sufficient? Or do you need to consider adding liability insurance? Depending on the exact type of your business, general liability insurance may not cover certain types of claims. For example, if you make a mistake in designing a project that you are completing, you may need professional responsibility to provide proper coverage for losses resulting from the error.
Then there is the inevitable demand that every contactor eventually faces: provide a certificate of liability insurance.
Although on the surface this seems like a simple request, the complexity of the detail lies in the request. If the requesting entity wants to be added as an additional insured and needs this to appear on the certificate, you may need to add the requesting entity through approval (although some policies automatically include additional insurance status for situations where a written agreement exists)
Anyway It is important for contractors to fully understand what an additional insured claim means. In short, the requesting entity asks the contractor to extend liability insurance from the contractor's policy to the requesting entity!
In the same way, if you use subcontractors, do you carry out the correct risk transfer? In other words, do you request to be appointed as additional insurance on your subcontractors' insurance? This is also important, as you certainly want coverage under their insurance program in the event that they cause bodily injury or property damage while performing a job on your behalf. there are many occasions where they are not cut and dry. You can see a request to add additional languages in the "description of operations" section. Be careful with this! In some cases, the units request languages that do not reflect the insurance program you have in place and – in extreme cases – what they are pressuring you for in this section may be illegal.
In short, it is always good business practice to discuss with your independent insurance agent any liability insurance requests you receive as well as review your business details with him or her. Your agent can handle other insurance-related needs you may have – such as liability insurance, professional liability insurance or a commercial umbrella.
The information above is of a general nature and your insurance and coverage may differ from the examples provided. Read your insurance policy in its entirety to determine your actual available coverage.
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