General Contractors need insurance.
Building and project owners require it as well as the building department when you open permits. Despite being a significant expense it is protection that is invaluable when you need it.
In this article we will cover how much it is going to cost, why cheapest is not best, why you need it, and how much protection you should have.
How much is general contractors insurance?
GC insurance is typically rated on gross sales with a rate of $15 to $25 per $1,000.
This is for a standard $1,000,000 per occurrence and $2,000,000 aggregate policy. The deductible varies but it is typically $0 but could be as high as $5,000.
Why isn’t the cheapest policy best for New York General Contractors?
Unfortunately you get what you pay for. The cheapest policies for general contractors include exclusions that can make the policy not worth the 200 pages of paper it is printed on.
These exclusions can be anything from residential exclusions, to action over / scaffold law exclusions. Residential exclusions can be tolerated if you do 100% commercial work.
An action over / scaffold law exclusion should never be accepted by any general contractor in New York.
Having an action over / scaffold law exclusion would be catastrophic to your business as all it takes is one falling from heights injury to send your business intro bankruptcy. Learn more about action over exclusions here.
Why do you need general contractors insurance?
Typically general contractors flat out cannot work without general liability insurance. The city or town you are working in will not allow you to open building permits and if you are working for an aware property owner they won’t let you near the job without providing proper proof of coverage.
But none of that should be your main reason, general contractors liability insurance protects your business.
Securing coverage to protect from things like, an injury to a bystander from a trip over a ladder, or damage to a customers property while you are performing work.
These incidents might seem insignificant until you get the first bill from your attorney when you have to defend yourself without insurance.
How much coverage is enough for New York General Contractors?
Since lawsuits in New York tend to settle for extremely high dollar figures, and as the general contractor you are typically held to a higher standard of responsibility a $1,000,000 general liability policy is probably not going to be enough coverage.
Often times developers or building owners will set requirements for the general contractor, however we recommend a $5,000,000 umbrella as that provides up to $6,000,000 per occurrence with the primary general liability policy.
However if you are tackling larger projects an increased limit would be recommended. Additionally if you are doing major renovations or ground up construction in NYC the PGL1 tool could set additional requirements above and beyond what the owner or developer is requiring. Learn more about the PGL1 Form here.
Bottom line getting the right coverage for your general contracting business is essential.
If you are interested in applying for coverage click the link below.
- Everything New York Contractors Need to Know About Action Over Coverage - February 16, 2018
- Who’s NYSIF and Why does everyone dislike them? - January 15, 2018
- What is a Certificate of insurance? and why is everyone asking you for one. - January 12, 2018