Contractors: Shield Your Business with General Liability Insurance in Michigan
As a contractor in Michigan, you're constantly exposed to risks that can threaten your financial well-being. From accidents on job sites to lawsuits alleging negligence, protecting your business is paramount. General liability insurance provides a safety net against these potential disasters.
Why You Need General Liability Insurance
Unexpected events can arise at any moment, leaving you vulnerable to claims from third parties. General liability insurance covers expenses such as medical bills, property damage, and legal fees if someone is injured or their property is damaged during your work. It also protects you from lawsuits alleging negligence, defamation, or other covered incidents.
Target of General Liability Insurance
General liability insurance is designed to protect contractors from legal and financial consequences resulting from claims:
Key Points
General liability insurance (GLI) safeguards contractors against claims arising from accidents, injuries, or property damage caused during their work. It covers a wide range of risks, including:
If an individual sustains injuries on a contractor's job site or due to the contractor's negligence, GLI provides coverage for medical expenses, lost wages, and other related costs.
GLI also covers damage to third-party property caused by a contractor's actions or equipment. This includes damage to neighboring properties, vehicles, or structures.
Coverage extends to claims for defamation, copyright infringement, or false advertising that could harm a contractor's reputation or business.
A contractor accidentally damaged a client's newly installed landscaping during a construction project. The client claimed $10,000 for the damages. The contractor's GLI covered the repair costs, saving them from significant financial loss.
The Michigan Construction Code requires contractors to have GLI coverage of at least $1 million per occurrence and $2 million in the aggregate. This ensures that contractors have adequate protection against potential claims.
GLI offers numerous benefits for contractors:
GLI provides peace of mind by protecting contractors from catastrophic financial losses.
Clients are more likely to trust contractors who maintain GLI, as it demonstrates their commitment to safety and professionalism.
Maintaining GLI is a legal requirement for contractors in Michigan, helping them avoid penalties or license revocation.
Contractors with GLI can gain a competitive edge in the marketplace by offering clients enhanced protection.
While GLI provides comprehensive coverage, certain exclusions apply:
GLI does not cover injuries or damages caused by deliberate or reckless actions of the contractor.
Claims arising from breaches of contract are not covered by GLI.
Injuries or illnesses sustained by the contractor's employees are covered by workers' compensation insurance.
Contractors should consider the following factors when selecting a GLI policy:
Determine the appropriate coverage limits based on the size and complexity of the contractor's projects.
Choose a deductible that balances affordability with adequate coverage.
Review the policy's exclusions to ensure it covers the risks most relevant to the contractor's business.
Contractors must maintain active GLI coverage throughout the duration of their projects. Failure to do so could result in legal consequences or financial penalties.
Contractors should consult with an experienced insurance agent to discuss their specific GLI needs. Additionally, they should:
Keep detailed records of any incidents that could potentially lead to a claim.
Provide the insurance company with prompt notice of any claims and actively participate in the claims process.
As the contractor's business changes, it is essential to review and adjust GLI coverage accordingly.