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Contractors Liability Cost: Contributing Factors

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When it comes to insurance for the construction industry, contractor liability is one of the most important policies you can invest in. For those new to the industry, you may not fully understand what contractor liability coverage can do for you, or what affects the terms of your policy. When you're ready to start calling for premium quotes, you need to understand what affects those prices. Here's a look at some of the things that you need to know.

What Type Of Work Do You Offer? 

Contractors who work on commercial projects will have different risk factors than those who work on residential projects. Your insurance carrier will want to know what type of work you do, whether it's commercial, residential, or both. This helps the carrier determine the potential value of liability risks and the exposure that your business has.

What Kind Of Experience Do You Have?

The more experienced you are in the industry, the less likely you are to make rookie mistakes that can be costly to your insurance carrier. Your carrier will ask about how long you have been in business, what experience you have in the industry, and any other training or knowledge you might have. Be forthcoming with all of your experience to help support the policy underwriting.

How Many Employees Do You Have?

Your liability risks increase with more employees on your company roster. The higher your payroll and the larger your employee count, the greater the risk of liability risks along the way. Your insurance carrier needs to know how many people you have working for you and may need to vet each one for liability exposure.

How Much Business Do You Do?

The larger the projects you take on, and the more business you receive, the greater the opportunity for liability issues. Your insurance carrier will ask about your company's revenues and the business volume to help formulate your policy.

How High Do You Want Your Liability Limits?

Finally, the amount of liability coverage that you want also matters. Consider how much coverage you need and talk with your insurance carrier about the exposure issues and potential losses you might face. That way, you can be sure that your liability limits are sufficient to protect your business.

These are just a few of the many things that can directly affect your contractor liability policy premiums. Talk with your contractor insurance carrier about other details that may apply in your particular case.


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