Artisan contractors are those that specialize in specific skills, such as carpenters, electricians, plumbers, roofers, landscapers, and other specialties. Because artisans provide only one portion of an overall larger project, they may be included under another company’s insurance as an additional insured. This does not protect the artisan contractor fully however, and it may not satisfy all clients or local legal licensing requirements.
Artisan contractors instead need commercial general liability insurance, or CGL coverage. General liability insurance for artisan contractors protects the business against the high costs associated with lawsuits, helps negotiate settlements, puts customers’ minds at ease, and often helps the company win new contracts.
While general liability insurance may not be required by law in all states, it is often required before a company can lease work space or win specific project bids.
What Does General Liability Insurance Cover for Artisan Contractors?
General liability insurance covers the costs associated with claims made by people who are not part of your business. Third parties can include customers, other contractors, or simply passers-by at a job location. These individuals may sue your contracting company if they are physically injured, if they feel your company caused property damages, or if they believe your advertisements harmed their reputation in some way. When lawsuits such as these arise, general liability insurance pays for the lawyers, pays to settle the suit out of court, or pays for judgments if your company loses the case.
Issues normally covered by commercial general liability policies include:
- Bodily Injuries
- Property Damages
- Product Injuries
- Personal and Advertising Injuries
What is bodily injury?
Artisan contractor’s liability insurance includes bodily injury because sometimes people get hurt. A prospective client may enter your workshop, for instance, trip on a cord and break his wrist from the fall. That person would expect your company to pay for medical expenses that arise from the fall, and possibly pay for rehabilitation and lost wages as well.
Whether at a business location such as a workshop, or on a jobsite itself, if someone gets physically injured, they may file a lawsuit. Whether it was your fault or not, general liability coverage will protect you from the financial fallout caused by those claims.
What is property damage?
In day-to-day business activities, artisans can accidentally cause damage while working on residential or commercial projects. The property damages portion of a general liability insurance policy protects contractors if the company or a company employee causes damage to someone else’s property.
A carpenter might drop a hammer that breaks a client’s window, for instance, or a mover may step on a mason’s tiles and damage them. A landscaping company employee may accidentally hit a water pipe while planting a new tree. Each of these instances needs to be paid for. The customer will fully expect the carpenter to pay for a replacement window, the mover to pay for new tiles, and the landscaping company to pay for repairs to the pipe and pay any associated property damage costs.
This coverage can rescue your business from potentially large claims from the client, contractor, or owner of the property.
What is product injury?
Product injury claims arise when a company recommends, sells, or uses a product for customers that is later found defective in some way. A carpet cleaning company may use cleaning chemicals that a customer has an allergic reaction to, for instance, and causes them to incur medical costs. If issues arise due to products associated with an artisan contractor, general liability insurance helps pay for the associated legal fees and settlements.
What is personal and advertising injury?
Advertising is one of the most used platforms to showcase Artisans’ work and can bring excellent, positive feedback and lots of new business. Unfortunately, it can also generate negative feedback and problems. If your advertising compares your company with a competitor, for instance, that competitor may claim that the advertisement slandered them. Likewise, a disgruntled former customer may bring allegations against your company for false advertising. Having advertising injury coverage in your artisan contractor’s general liability policy protects you legally and financially against these types of issues.
Other Insurance for Artisan Contractors
Worker’s Compensation Insurance
This coverage is a protection against accidents that cause injury or illness to your employees. Worker’s compensation insurance can help you and your business cover the claims of the person injured. If an employee of your landscaping business gets cut by a saw blade while trimming bushes, for instance, this coverage will help pay for the employee’s hospital and medical bills associated with the work injury. Likewise, if a work injury causes temporary or permanent disability, worker’s compensation will help replace the lost income as well as pay for rehabilitation and training when applicable.
Commercial Auto Insurance
Road accidents are considered a normal risk in business when owning one or more vehicles, especially since artisan contractors travel frequently between job locations. Whether you or one of your employees use the company vehicle during work, if an accident occurs, commercial auto insurance can make a major difference. If injuries are sustained by you or your employee, another person, or damage is done to the vehicles, this coverage pays those related expenses.
Warranty Insurance, or Completed Operations Insurance
This insurance generally refers to the finished product or work of the artisan contractor and is sometimes included as part of a general liability insurance policy. The work of the artisans is expected to be expert in quality, and it’s assumed that the finished project will last and/or it can’t be damaged easily. In rare cases, problems arise after an insurance policy has expired. This coverage protects against those types of events. If a plumbing company is sued due to a burst pipe after the policy is no longer in force, completed operations coverage can still be in effect. The details of this coverage vary from one company to another, so be sure to speak with your insurance agent to understand your coverage specifics.
Surety Bonds
Credibility in the business world is incredibly important, whether you’re trying to establish a good start or simply grow as an artisan contractor. Bond insurance, or surety bonds, shows clients and prospects that your company adheres to regulations required by the state and industry.
Surety bonds are required by most state or local governments before you can acquire permits to complete a job. These bonds guarantee that you will complete work specified on a contract, and that you will complete it by a certain time or within specific standards.
Insurance Limitations
Keep in mind that insurance policies have coverage and payout limitations. Each policy and addition to your policy comes with maximum dollar amounts of coverage. Separate coverage amounts may apply to what your artisan contractor company can recoup or what benefits a third party is entitled to.
Depending on the type of artisan contractor insurance policy and riders you choose, there may be a maximum payout per event/claim, or a maximum total amount for a specific period of time. Take the time to determine just the right coverage your artisan contracting company needs.
