Work with Confidence with Contractor Liability Insurance
As a contractor, you’re held to a high standard when it comes to delivering your service or advice. If a client believes you’ve cost them financially due to your mistake, there’s a good chance you could be sued. Whether you’ve done anything wrong or not, you’ll still need to cover the costs of litigation.
Unfortunately, Commercial General Liability Insurance policies (CGL) don’t cover financial loss claims. That’s where Professional Liability Insurance for contractors comes in. If you’re sued by a third party or client due to a perceived or actual mistake causing additional financial costs, EasyCover can help protect you with Contractor Professional Liability Insurance.
We make getting contractor liability insurance easy:
- Enter your information for a free Contractor Professional Liability Insurance quote
- Select the policy features and limits that works for you.
- Pay for it online.
It’s direct, simple, and quick. In just under 5 minutes, you can work with confidence with your Contractor Liability Insurance Policy.
The Basics of Contractor Liability Insurance
If you’re hired on as a contractor, you’re likely there to perform a specific, often specialized, job or service. You may produce a product or maybe you provide advice. If a third party or your client claims you’ve failed to deliver, made a mistake, or cost them financially, they may sue you. Regardless of who’s right, you’ll have to deal with the litigation process.
As a professional, you may be required to purchase Contractors Professional Liability Insurance to cover yourself in case any lawsuits should arise claiming malpractice, negligence or error. Professionals may also be asked by clients or other stakeholders to provide proof of insurance and certain professionals may be required to carry a certain minimum amount of contractors Professional Liability Insurance in order to operate.
What does Contractors Insurance cover?
Contractor Professional Liability Insurance helps cover the legal expenses, damages or settlements for claims that fall under the policy conditions, which exclude deliberate dishonesty, misrepresentation or fraud. As litigation costs can quickly escalate, this coverage is critical if you’re a contractor.
How much Contractor Liability Insurance do you need?
The amount of coverage you need depends on:
- Your industry
- The number of clients you have
- Who your clients are
- The size or value of your contracts
- The potential size of a legal claim that could be made against you
- Your contractual requirements
You can choose between a $1 million, $2 million and $5 million coverage limit. This is the most that will be paid out over the 12-month policy period, regardless of how many claims you make. This includes judgement awards, settlement, and defense costs.
Your deductible will depend on your company’s revenue, ranging from $250 to $1,500 per claim. You’ll need to pay a deductible for each claim, i.e. if you have two claims, you’ll pay the deductible twice.
Keep in mind you won’t be covered for deliberate fraud, dishonesty or misrepresentation and not all scenarios are covered. If you fail to advise your insurance company of a known incidence that could likely result in a claim, you may also not be covered. For example, let’s say you made a mistake that results in a delay for a project. You should let your insurer know, even if it doesn’t escalate to a lawsuit. Sometimes being served comes as a complete surprise, but often you know ahead of time that there is a risk. Communication is key!
Examples of Contractor Professional Liability Insurance
Negligence or Errors: If you make a mistake while performing your professional contractor duties, you can be sued by your client or a third party. This can be as minor as forgetting a small detail that delays a project or a big mistake that costs millions of dollars to repair.
Misrepresentation: Your client may feel your advice is inaccurate or misleading. They could sue you for providing this faulty information.
Loss of Documents: Losing your client’s documents would be a headache at best, and at worst, you could be taken to court.
These are just a few scenarios you could encounter as a contractor. EasyCover can help protect you from these events and more. Don’t wish you were covered, get Contractor Professional Liability Insurance today!
What types of Contractor Liability Insurance are available
There are many different types of Contractor Liability Insurance that are available. Depending on your business and industry, these coverages are essential to help safeguard your equipment, team, and even your reputation against certain losses.
- Business liability
- Commercial auto
- Property insurance
- Equipment breakdown
- Cyber insurance
Accidents do happen. It is important to assess the risks that your business may expose you to and prepare accordingly with the right Contractor Liability Insurance.
Who needs Liability Insurance for Contractors?
Contractor General Liability Insurance may help protect a wide range of contractor-based professions from claims arising from bodily injury or property damage that occur while undergoing a contract job. This coverage may offer reimbursement for settlement costs or lawsuit expenses that could arise even after the project is completed. Who needs Liability Insurance for Contractors?
- General contractors
- Property owners of a construction project
Subcontractors are often required to carry their own insurance by the General Contractor who would want to ensure their own insurance will not be depleted by a subcontractor’s mistakes.
Is it mandatory to have Contractor Liability Insurance?
Short answer, yes. In most provinces contractors are legally required to carry a certain minimum limit of liability insurance, or your hiring party will ask for proof of insurance before deciding to work with you. Contractor Liability Insurance is designed to protect both you and the customer if anything happens on the job or after the project is finished.
The Cost of Contractor Liability Insurance
How much does Contractor Liability Insurance cost? Typically the hiring party or governing body will require that you carry at least $2,000,000 liability coverage to ensure that there is a safety net in the event that anything should happen.
- The average price for contractors liability insurance begins at around $850 per year with the standard amount of $2,000,000 liability protection.
- For higher coverage limits of around $3,000,000 liability rates can be around $1100 per year or $1350 per year for $5,000,000 liability.
- For example, your average photographer might pay around $500 per year for contractors liability insurance.
Contractor Professions We Cover
- Contracts manager
- Fire auditors
- Health and safety
- Maintenance manager
- Operations manager
- Project manager
- Regulatory reporting
- Forensic services
- Health professionals
- Dance instructors
- Health coach
- Life coach
- Occupational therapist
- Personal trainers
- Pilates instructors
- Registered massage therapists
- Speech pathologist
- Yoga instructors
- Zumba instructors
- IT contractors
- CRM systems
- IT facilities management
- IT hardware consultant
- IT hardware or software sale and supply
- IT network architect
- IT outsourcing consultant
- IT program manager
- IT project management
- IT security consultant
- IT software development, consultant or programmer
- IT analyst
- IT system designer
- IT training
- Network communication consultants
- PC/IT network support
- SEO consultant
- Website designer
- Legal services
- Advertising consultants
- Marketing consultants
- Website designer
- Graphic designer
- Market research
- Interior designers
- Project Managers
- Social Services
We offer liability insurance for contractors in a variety of industries – if yours isn’t listed here, don’t worry. Chat with us and we’ll see what we can do!
How much Contractor Liability Insurance should I have?
The amount of coverage depends on the nature and size of your business, who your clients are, as well as a number of other factors, including:
- Does your business transport equipment or travel in the course of providing services?
- Does your business provide financial advice or service? Contractors Professional Liability Insurance may be necessary for these professional business-specific risks.
- What is the scope of your projects or services? Are your clients individuals, small businesses or large corporations?
- Do you do manual work or manage projects?
Risk Management for Contractors
While Contractor Professional Liability Insurance is there if you need it, it is best to avoid litigation altogether.
EasyCover’s contractor liability insurance protects you if your risk management isn’t enough. Our coverage is comprehensive and affordable. We make it easy for you to protect yourself. Get a free contractor liability insurance quote from our online quoter in less than 5 minutes!
Making sure everyone is on the same page when it comes to expectations and progress is important. Open and honest communication can go a long way. Ask questions and clarify if you’re not sure about something.
Keep written record of all communication. Follow up an in-person meeting with an email confirming what was discussed. You should also keep backup copies of all paperwork, receipts, and communications. A digital cloud copy is also a necessity. In the event you are sued, this could be important evidence.
Implement procedures to ensure quality. For some things, this may be having multiple eyes go over something before it’s delivered. For others, it might be following a specific check list for each install. Double-check the deliverable against the expectation.
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