CONTRACTORS LIABILITY INSURANCE

Contractor’s Liability Insurance provides coverage against lawsuits filed for Bodily Injury &/or Property Damage alleged against the Contractor. Claims may arise while the contractor is in the course of construction or after the construction is completed. Claims during the course of construction could be a fire caused by the contractor drilling a screw into a gas pipe, or a piece of debris hitting the homeowner or a passer by. Once the job is completed a claim may arise months or years later due to faulty work such as a water pipe break due to faulty soldering, electrical fire due to faulty wiring, or water damage due to faulty roofing.  

Contractors Liability Insurance is essentially categorized into three areas:  

Artisan Contractor:

Artisans perform work primarily for residential homeowner’s and small business owners. Artisan insurance policies provide Commercial General Liability with the lowest premiums, however certain coverage is not available. Typically there is a limitation for Contractual Liability, Primary and Non Contributory is not available, and Waiver of Subrogation is not available. Since the Artisan insurance policy is designed for dealing directly with the homeowner or small business owner these coverage’s are not always needed. Artisan insurance policies typically permit sub contracting up to 15%

of gross sales. The sub contacting is usually for the trades that require a license such as Electrical and Plumbing. For added protection all Sub Contractors must have Commercial General Liability limits equal to yours and name you as “Additional Insured.”  

Sub Contractors:

Sub Contractors perform work primarily for larger General Contractor’s, Commercial Building Owners &/or Management Companies,

Municipalities, Cities, Government Agencies, Hospitals, School Districts , etc. Sub Contractor insurance policies provide Commercial General Liability and typically provide full Contractual Liability, offer the Primary and Non Contributory, and Waiver of Subrogation endorsements. Sub Contractors have their own employee labor however Sub Contracting in excess of 15% of sales is acceptable providing the insurance policy includes the proper classification for Sub Contracted work. Typically Sub Contractor policies require that all Subcontractors have Commercial General Liability limits equal to yours and name you as “Additional Insured,” there must be a written contract with all subcontractors which includes an Indemnity/Hold Harmless clause in your favor.

General Contractors:

General Contractors perform work primarily for Commercial Building Owners

&/or Management Companies, Municipalities, Cities, Government Agencies, Hospitals, School Districts , etc. Typically General Contractors do not have any employee labor and Sub Contract 100% of the work; many times General Contractor’s are referred to as “Paper GC’s.” General Contractor insurance policies provide Commercial General Liability with full Contractual Liability,

Primary and Non Contributory, and Waiver of Subrogation endorsements.

Typically General Contractor policies require that all Sub Contractors have Commercial General Liability limits equal to yours and name you as “Additional Insured,” there must be a written contract with all subcontractors which includes an Indemnity/Hold Harmless clause in your favor.  

TOOLS AND EQUIPMENT  

Some Contractor Insurance Policies provide limited coverage for Tools and Equipment. Many contractors with few, or inexpensive tools choose not to insure them. However large contractors with extensive and expensive tools and equipment will insure them against fire, theft, and water damage among other perils under a Floater Policy.    

EXCESS LIABILITY/UMBRELLA LIABILITY    

In many cases Sub Contractors and General Contractors are required to provide Liability Limits that are higher than the standard $1,000,000 Per Occurrence, $2,000,000 Aggregate limit provide under a Commercial General Liability Policy. Excess Liability would be used for a contractor that does not have any vehicles owned, leased, or registered to the business entity. For those contractors that own, lease and register vehicles to the business entity Umbrella Liability would also cover any bodily injury &/or property damage claims in excess of the Commercial Automobile Liability policy.  

COMMERCIAL AUTOMOBILE LIABLITY  

In some cases a self employed Artisan Contractor may be eligible to insure a van or pick up truck under a Personal Auto Policy. However for Contractor’s that incorporate and lease, own or register their vehicles under the business name a Commercial Auto Policy is necessary. A Commercial Auto Policy adds extra protection to the business owner when vehicles are operated by employees.    

WORKERS COMPENSATION  

New York State requires Contractors to have a Workers Compensation Insurance policy to cover their employee(s) whether “on the books” or “off the books.”   

Artisan:  

For the Artisan Contractor that is self employed and has no employee(s) whether “on the books” or “off the books” a Workers Compensation Policy is not required. However in some cases the Artisan Contractor may be required to have a Workers Compensation Policy as a pre requisite to work on a particular job. Artisan Contractor’s should be aware that they can be held personally responsible for medical, lost wages, disability, benefits, among other expenses incurred by anyone working for them whether “on the books,” or “off the books.”  

Sub Contractor & General Contractor:  

For the Sub Contractor and General Contractor the primary concern is to have the proper classification(s) attributed to their labor employees and to be sure all Subs hired provide evidence of having a Workers Compensation Policy. Section 56 of the New York State Workers Compensation Law makes you responsible via your Workers Compensation Insurance Policy for payment of benefits to an injured employee of an uninsured subcontractor. As a result of this liability you will be charged premium for any uninsured subcontractor that works for you. Any Out of State Sub Contractors must show New York State listed in item 3A of the policy.    

BUILDERS RISK POLICIES  

A Builders Risk Policy cover’s the Owners structure against physical damage during the course of construction. A Builders Risk policy can be for new construction from the ground up or remodeling an existing structure.  

CONTRACTORS SURETY BONDS  

There are numerous Surety Bonds that may be required of the Contractor from time to time or on a permanent basis. Whether it’s License and/or Permit,

Bid/Performance, Street Obstruction, Sidewalk and Curb, Maintenance, Payment, Sub Division, Site Improvement, among other bonds we offer a broad market for underwriting your Bonding needs.