For many small business owners, the need for General Liability insurance seems pretty murky, at best. Subcontractors that provide specialized services for general contractors might not see a need for it, considering they do most of their work for the GC that hired them rather than working for the client themselves.
This view is wrong on a couple of counts. First, general contractors often won’t even consider hiring subcontractors that don’t have general liability insurance. Secondly, any trade should always account for Murphy’s Law and be well prepared for that one freak accident that can leave you and your business destitute from legal fees, medical bills and property repair costs.
What is General Liability and what does it cover?
General liability insurance protects the insured from lawsuits relating to third-party property damage, bodily injuries and items like slander and label. If you are, for example, an HVAC subcontractor with general liability insurance, if you cause some property damage during an installation, the bills will be covered by the policy.
Accidents always seem so abstract right up until the minute they happen to you, at which point things can get very real very quickly. Mistakes are inevitable, and in an industry like construction that involves the use of dangerous equipment and very large, complex structures, they can be catastrophic both for people’s health and your wallet.
Perhaps the most important part of general liability isn’t its ability to cover the bills caused by an accident but that it covers the legal fees that go along with such cases. Even if you aren’t at fault and the case gets dropped, you’re on the hook for multiple thousands of dollars. If it goes to the courts, the legal fees for defending yourself can reach into the tens of thousands even if you end up being exonerated.
This is especially useful in cases where you provide subcontracted work for an especially litigious and dubious general contractor. Contract work is notorious for the amount of legal action taken within the field, and GCs looking to cut corners are often sued by dissatisfied clients.
The contractors, now under pressure, often look to shift blame towards the subcontractors they hired out to provide specialist work in order to ease their burdens of liability. The especially nasty GCs do this because they know most subcontractors don’t have the capital to effectively fight them in court.
The problem is, they’re often completely right. Depending on the size of your operation, it’s likely that you don’t have the resources necessary to fight these kinds of grinding, unending legal battles – which is exactly why general liability can be a lifesaver.
If you’re looking for insurance policies for your trade in the San Diego area, S.W.A.N. Insurance can get you the coverage you need for your business to thrive even in the dangerous and cutthroat construction industry. S.W.A.N. can analyze thousands of policies and determine exactly what your business will need in the coming years to make sure you can focus on growing your business.
