It’s one thing to be told that general liability insurance can protect you from the most common risks you face as a trade or general contractor, such as third-party injuries or damage to someone else’s property. It’s quite another thing to hear it direct from the contractors who have been in those exact scenarios themselves.
If you’re not sure if you need liability insurance for your contractor, construction, or handyman business...keep reading. The best advice comes from someone who has faced a lawsuit firsthand, and seen the saving grace in having general liability insurance.
Here are the tales of three real-life contractors just like you, and their brushes with construction disaster.
#1. The Case of the Curious Visitor
Sometimes the biggest liability on a project is the one thing you can’t control or manage: an on-site visitor. This is something one general contractor, John, learned the hard way.
John was hard at work on a residential remodel project when the homeowner brought a friend over to check out the progress. The curious visitor was admiring John’s work when he was suddenly struck in the head by a ladder that had been propped up against a wall.
The homeowner sued John for his friend’s injury, expecting the contractor to pay the price for medical and other expenses from the accident.
Luckily, John had general liability insurance. His policy covered the costs of defending himself against the lawsuit, which included attorneys’ fees, court costs, and a settlement.
#2: A Soggy Tale of Water and Woe
Miguel, an experienced drywall contractor with 15 years in the trade, was working on a basement drywall repair project that should have been pretty cut and dry. In order to reach the damaged area, his employees disconnected the home’s sump pump.
After the job was done, neither Miguel or his employee remembered to reconnect the small pump.
Instead of re-routing ground water away from the home, the sump pump sat unoperational. After the drywall contractor and his team left, the basement flooded and the home suffered from extensive water damage.
Miguel’s general liability policy covered the costs of repair for the property damage that resulted from the incident. The water damage could have cost Miguel a huge bill for repairs, but thanks to his general liability insurance it only cost him a deductible.
#3: All it Takes is One Mistake
With more than thirty years in the business and a perfect track record, Tony was an electrical contractor in high demand. When a local commercial project was being built, Tony was their first pick to install lighting throughout the building.
Unfortunately, Tony’s 30-year track record went up in smoke when an electrical fire decimated the commercial building. A fire that ultimately led back to Tony’s completed work.
Tony’s bad luck didn’t stop with the first mistake made in his life-long career, either.
Because he had gone so long without an accident, injury, or claim to his name, Tony had decided to save some cash earlier that year and let his general liability policy lapse. He had no coverage for the incident, and had to pay for the property damage and lawsuit that followed out of his own pocket.
The Moral of the Story
Two out of three of our tales concluded with a happy ending. The contractors filed a claim with us, and we were able to cover the incident. The cost to each was only a fraction of what it could have been. The contractors paid their deductible and went on their way.
But not every story ends so well, and for one of our contractors, one small mistake resulted in a major financial setback.
General liability insurance provides a safety net to protect your business in the event of an unforeseen incident. Like most of your safety equipment, there’s a chance that may never need it to kick in and do its job. But the one time something does go wrong, you’re going to be very glad you’ve got all your protective measures in place.
Construction is a high-risk industry, and there’s always a chance a job could result in accident, injury, or property damage to a third-party. If you have general liability insurance, then your story could be one more that ends happily ever after.