FAQ

General liability insurance protects bodily insuring and property damage claims against the company. There are basically four parts, premises, products, operations, and completed operations. Generally, you must be negligent in some way and legally responsible. Besides, it covers the cost of defending the insured against the charges alleged in the lawsuit, including attorney fees, investigation costs, and other legal expenses.

General Liability Insurance does not cover workplace injuries that happen to employees or other people on your payroll. Workers’ compensation insurance may cover this.  Also, general liability insurance does not cover the costs of damage to your building or owned business personal property. It can help cover the costs of damage your business causes to others. Commercial property insurance is designed to help cover the costs of damage done to your business’s property. Inland marine coverage (it’s not for a ship, it old school terminology) is for your tools and equipment on and off-premises.

Your specific policy will have a maximum amount that is paid out for a claim. Any liability that you are responsible for over and above your maximum is your responsibility. For example:

• You are sued for $350,000 in medical costs from an injury.
• You are responsible for an additional $100,000 in legal fees.
• Your policy has a maximum claim liability amount of $300,000.
• You are responsible for the additional $150,000 not covered by your policy.

When you select your policy, keep in mind that your policy will have a maximum amount the insurance company will pay, so select your policy carefully.  Many-times on smaller policies, a $300,000 verse a $1,000,000 can be $100-$150 per year.  These days $1,000,000 limit is recommended and quite common a requirement by a general contractor.

FAQ Illinois General Contractors Insurance.  Your general liability policy has a set limit.  It does not mean you cannot buy more.  All you need to do is add commercial umbrella insurance. A commercial umbrella insurance policy provides additional coverage above and beyond what your general liability insurance policy does.  It can also go over your workers’ compensation and commercial auto policies, giving you that extra layer of protection.  Pricing starts at $525 to $1,000 per million per year and is subject to the type of operation you are running.  For example, interior carpentry verse roofing can also depend on your contracting business’s size.

Say one of your contracting employees has an accident in the company work truck, and the result is that you owe $1,400,000 m in legal fees and medical bills for the other party. Still, your commercial auto policy has a $1,000,000 limit.  This is when your commercial umbrella insurance policy would kick in to cover the other $400,000, so you are not left owing that money out of your own pocket.  Being prepared with a commercial umbrella insurance policy is an easy way to protect your business from going bankrupt if an accident ends up costing more than your general liability insurance will cover.

Personal automobile insurance policies typically exclude vehicles that are used for commercial and business purposes. Specific language in the exclusion may include the hauling of tools, equipment, and materials. If you get into an accident without commercial auto insurance, you run the risk of getting sued by anyone involved in the accident and facing expensive medical and legal costs as a result. Commercial automobile insurance, also called business auto insurance, protects you and pays for repairs, medical costs, and legal fees if you get in an accident.  This comes up on an almost daily basis regarding trailers used for the transport and hauling of tools and equipment.  Business trailers should be on a commercial auto policy.  There is a small liability charge, and then if you wish to add physical damage coverage, another small charge.

Many contractors are surprised, but tools and equipment (also in your trailer) are not covered under your commercial auto policy. There is covered under a separate policy or endorsement called inland marine.  Any time you transport your tools to a job site, they are vulnerable to theft and any number of catastrophes. How can you work if your tools are destroyed or stolen?

Purchasing this valuable cover is just peanut compared to what you can lose. Carrying this inland marine policy, your business is protected if your tools are stolen, vandalized, or otherwise destroyed on the way to or from a job, you know you may have some coverage.  We often explain it like this: If your tools and equipment are stolen, knowing you will get some money makes it easier to through down the credit card, by replacements, and get back to work.

In a hold harmless agreement, one party (the Indemnitor) promises to reimburse, and in some cases defend, the other party (the indemnitee) against claims or suits brought against the indemnitee by a third party. The purpose of the hold harmless is to transfer the risk of financial loss from one party (the indemnitee) to another party (the Indemnitor).

Employees have no coverage concerning injuries sustained by the named insured, its partners or members, or another employee or volunteer.

Workers Compensation insurance provides certain payments to an employee who suffers an on-the-job injury due to an accident or occupational disease. This coverage is required by Illinois law if you have employees. It covers employee accidents, occupational disease, wage loss, and possibly retraining if you cannot continue in your current profession.

A certificate of insurance (COI) is a one-page document (a snapshot) that provides policy details on your insurance coverage.  It’s proof of insurance that many general contractors require before they pay their subcontractors. It provides essential information like the types of coverage, limits, your insurance company(s), your policy number, the named insured (who is insured), and the insurance policy’s effective and expiration dates.

Sometimes referred to as a certificate of liability insurance (COI), accord certificate, or accord 25, it is often required to win contracts and get paid. This way, your potential client can know for sure whether you have the contractor’s insurance. Many companies and individuals that hire contractors need to know that they will not be held liable for damages, injuries, or substandard work, and therefore require that you have insurance. It also can prevent them from being charge don their policy at their annual insurance audit time.

This basically the sharing of your liability limits with another. Construction contracts frequently require contractors to add other parties to their liability policies as additional insureds. It is the second layer of protection for the contractual indemnity agreement. Additional insured can submit claims directly to the insurer without first filing a claim against the named insured.

 If a claim or loss occurs, immediately contact your agent at Illinois General Contractors Insurance.com.  Our main office phone number is 952-469-0425