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Are you wondering, “What is liability?” If so, we got answers for you.!
Let’s parse out “what is a liability” in different scenarios so you can get a better understanding.
What is the liability for the average person?
If you’re the average person living in America, you probably know that lawsuits aren’t too hard to come by. There is a growing trend of people suing each other for accidents, disasters, crime, and anything else the law allows them to think up. From driving a car, to wrongly trespassing on someone’s property, there are multiple ways that you can be held liable.
For example, let’s pretend you have a large tree in your backyard. This tree is not only large, but it’s also very tall and starting to rot in some areas. You procrastinate on getting the tree cut down. Unfortunately, you wait t0o long and the tree eventually falls down onto your neighbor's shared fence and their property, causing damage. Because you didn’t cut the tree down before the fall, and the tree was your responsibility, you are held liable for the damages to the shared fence and your neighbor’s property. In this case, if you don’t have insurance, you will have to pay for the cost of replacement to the fence and your neighbor’s damaged property out of your own pocket.
This event sounds like a small case, but a car accident, which is an everyday occurrence in America, can be a nightmare. Just think. Everyone in the USA is required to have car insurance, which includes a little bit of liability insurance. The average personal auto insurance policy usually includes $250,000 in liability for every person and $500,000 for every accident. This sounds like a lot, but sometimes it’s not sufficient. Here is why:
If you get in an accident, someone gets hurt and you are held liable by the courts to provide for that injured person, your policy will ensure you at most up to $250,000. But what if there was a 4 person family in the vehicle that you struck. That means 4 x $250,000 comes up to 1 million dollars! You would not even come close to clearing the cost of the accident because you would be left with half a million dollars left to pay!
As you can see, liability in America can deplete your retirement funds, and savings accounts, and take everything you own if you are not protected with the proper insurance. The solution for this example would be to invest in umbrella liability insurance, which would give you more coverage.
What is the liability for contractors?
If you are a contractor, you’re at risk of injuring someone or damaging someone’s property due to the nature of your work. Someone can get hurt at your workplace, on the worksite, or even as a result of your finished project. In the case where you cause harm, injury, or damage to a third party, you will be required to pay the cost. If you don’t have insurance, you will be required to pay out of pocket. The contractor’s liability insurance will protect you from having to pay thousands of dollars that you don’t have in the case of an accident. Liability insurance will provide coverage in the following areas:
Bodily Injury:
This includes injury to other persons at your business or on your client’s property.
Property Damage:
This includes damage to the property under construction.
Personal Injury:
This includes any damages to a person or business's reputation.
Advertising Injury:
This includes damages caused to a person or business as a result of your advertising.
Medical Payments:
This includes payment of medical expenses to a person injured on the construction site.
There is also coverage for independent contractors or subcontractors that you have hired or partnered with. This will cover any damages that they may cause to a third party.
How much liability insurance do I need?
The amount of liability insurance you need depends on the amount of risk that surrounds your line of work. For example, if you are working in a large public mall you will need more liability insurance than if you were doing contractor work in a residential home. In the first case, you would be working with the public, businesses, and a large body of people, hence why you would need more insurance as opposed to a small home with four people. To find out home much liability insurance you will need, click here to get a free 24-hour quote.
How much does liability insurance cost?
The cost of liability insurance depends on the amount of insurance you need and your level of risk. There is no set cost for insurance. The best thing to do is to shop around for insurance rates to find the best deal. To save yourself the time of shopping around for insurance rates, enter for a free quote and we will do the shopping for you. We compare rates and give you results within 24 hours.
Where can I get liability insurance?
You can get liability insurance from many financial institutions, and independent insurance companies. Here at ContractorsLiability.com, we provide liability insurance for contractors including:
- plumbers liability insurance
- roofers liability insurance
- electricians liability insurance
- worker’s compensation
- general contractors insurance
If you’re on the market looking for affordable contractors liability insurance, enter for a free 24-hour quote and we will shop around for the best rates for you. Click here to get a quote.