Protecting your assets and reducing risks are essential to your daily operations as a business owner or contractor. Hence, one of the most crucial choices you'll ever make is selecting the right insurance policies to guard against unanticipated events that cause financial loss.
Two popular policies you might require are general liability and builder's risk insurance. In this article, we'll look deeper at these two types of insurance and emphasize their distinctions.
General liability insurance shields companies from a variety of claims filed against them by third parties for bodily harm, property damage, personal injury, and injury to their reputation.
For companies of all sizes, general liability insurance is essential to risk management because it may shield them from potentially crippling financial losses brought on by litigation and claims.
Regardless of the size or sector of the business, this insurance plan is often advised because it is made to cover a wide variety of risks. Certain hazards that businesses may encounter are covered by general liability insurance, including slip-and-fall incidents, property damage brought on by business operations, and advertising-related injuries, including defamation and copyright infringement claims.
It is also intended to cover the costs of legal fees and other costs incurred in defending a claim and costs related to lawsuits, settlements, and verdicts.
Generally speaking, general liability insurance policies are adaptable, enabling businesses to customize their coverage to meet their unique needs. But, common coverage limits include bodily injury, property damage, and personal and advertising injury. Coverage limits might vary depending on the policy and the type of business.
Protecting your assets and reducing risks as a business owner is crucial for the long-term profitability of your operations. One of the most crucial steps in managing these risks is obtaining the proper insurance coverage, such as general liability insurance.
Protecting your company from potential lawsuits, claims, and financial losses requires general liability insurance. However, it can provide you peace of mind so you can concentrate on what's most important—expanding your business—while also helping you establish credibility with stakeholders and fulfill contract requirements.
This kind of policy offers protection from a range of claims brought against your company by other parties, including clients, suppliers, and other stakeholders.
Despite your best efforts, accidents can still occur. General liability insurance can help defend your business from any legal action and claims if someone is hurt or property is damaged as a result of your operations or products.
On the other hand, the builder's risk insurance is a policy that provides coverage for physical damage to a construction project during its construction phase.
Contractors, builders, and property owners starting new construction or restoration projects frequently obtain builder's risk insurance policies. The policy typically covers the construction phase, which can last anywhere from a few months to many years depending on the size and complexity of the project.
This insurance coverage covers builders, contractors, and property owners against hazards related to building projects, such as theft, vandalism, and damage from natural disasters.
Builder's risk insurance typically covers the following:
1. Property damage: Coverage for damage to the building or structure being constructed, as well as any materials, fixtures, or equipment used in the construction process.
2. Theft and vandalism: Coverage for theft, vandalism, and other criminal acts that may occur on the construction site.
3. Business interruption: Coverage for lost income and other expenses that may arise as a result of construction delays or interruptions.
4. Additional expenses: Coverage for additional expenses that may be incurred due to unforeseen circumstances, such as the cost of removing debris after a natural disaster.
It's crucial to remember that the coverage of builder's risk insurance doesn't include mishaps or injuries that could happen on the job site. You would require separate general liability insurance and/or workers' compensation insurance plans.
For builders, contractors, and property owners working on new construction or restoration projects, builders' risk insurance is a necessary form of insurance policy. First, builder's risk insurance is frequently required under construction contracts for builders and contractors. If you don't, you risk fines and perhaps legal action. With this insurance in place, you can ensure that you adhere to your contracts' terms and avoid expensive legal disputes.
Another important thing to note is construction projects are inherently risky, with many factors outside your control that can cause property damage, such as fire, weather, and theft.
It offers protection against financial loss and offers peace of mind by covering property damage, theft, and other losses that may occur during the construction process.
Two separate forms of insurance protection that provide defense against different dangers are general liability insurance and professional liability insurance. Here's a closer look at the key differences between these two types of insurance:
Businesses are safeguarded by general liability insurance from claims of personal harm or property damage allegedly brought about by their activities, goods, or services. This kind of insurance is intended to cover third-party claims, such as those brought by clients, suppliers, or other non-employees of the company.
Examples of incidents that general liability insurance may cover include slip and fall accidents, product defects, property damage caused by the business's operations, and advertising injuries, such as defamation or copyright infringement.
Errors and Omissions Insurance, or referred to as Professional Liability Insurance, is a type of insurance that defends professionals against allegations of negligence or mistakes in the services they render. The purpose of this kind of insurance is to pay claims made by clients or customers who have incurred monetary losses or other harm as a result of the professional's actions or inactions.
Examples of incidents that Professional Liability Insurance may cover include mistakes made by accountants, lawyers, architects, and other professionals that result in financial losses for their clients.
The type of business you have, the risks involved in your industry, and your unique demands all play a role in determining the best form of insurance for your company.
Here are some broad principles to assist you in selecting the appropriate kind of insurance for your company:
General Liability Insurance: If your business involves interactions with customers, vendors, or other third parties, General Liability Insurance is essential. This type of insurance covers claims of bodily injury or property damage caused by your business operations, products, or services.
Professional Liability Insurance: If you are a professional who provides specialized services, such as a lawyer, accountant, or architect, Professional Liability Insurance may be necessary. This type of insurance covers claims of negligence or errors in your services to your clients.
Property Insurance: If your business owns the property, such as a building or equipment, Property Insurance is essential. This type of insurance provides coverage for damage to your property caused by perils such as fire, theft, or weather-related incidents.
Business Interruption Insurance: Business Interruption Insurance might be required if the physical location of your company is crucial to its operations. This kind of insurance covers lost revenue and additional costs that can occur if your business must close temporarily due to a covered peril, such as a fire or natural disaster.
Cyber Liability Insurance: If your business collects, stores, or transmits sensitive information, such as customer data or financial information, Cyber Liability Insurance is important. This type of insurance covers losses arising from data breaches, cyberattacks, and other cyber-related incidents.
Hotchkiss Insurance has a dedicated team that can assist in guiding you towards the right Insurance type that fits your company’s needs.
The ideal approach to choosing the correct kind of insurance for your company is to consult with the right Insurance company. They can assist in determining your unique requirements and offer suggestions for the kinds and quantities of coverage that will offer complete protection for your company.
Hotchkiss Insurance has been giving protection to a variety of businesses, including residential home building, commercial construction, trade contractors, manufacturing, distribution, restaurant and hospitality, retail, and more, for over 45 years. We believe that protecting one's most prized possessions will help individuals and companies thrive and prosper.