If you are a contractor or if you hire contract labor in California, you could be liable for any accidents that occur on your job site and injure other people, whether you are directly responsible for the accident or not. In any incident in which there are injuries, it is very likely that the victims will hire a personal injury attorney who will try to recover damages. This means that, as an employer, you must be concerned about more than just ensuring that the people who are injured have good medical care after an accident. You must also think about your legal liability in the wake of any accident and whether or not you could be held responsible for paying for injury costs.
Contractor’s liability insurance pays for the damage caused to others on a job site or as a result of your work. This coverage protects the contractor, but those who hire contracted services may also benefit from having specific coverage in their liability policies for these situations, as well. Even if you hire a contractor who is insured, you may still want to have your own coverage to be sure you are completely protected.
There is a bit of confusion as to what contractor’s insurance actually covers. While contractor’s insurance may be useful to pay for damages to innocent bystanders, it cannot substitute for insurance that pays for injuries to workers. Further, it is very important to be sure that the people you hire have proper insurance coverage for their employees as well as liability policies to protect those who may be injured on a job site. In other words, any time you have contractors on your property, there should ideally be three layers of insurance protection: the contractor’s workers’ compensation, the contractor’s liability policy and your own liability coverage.
Most contractors have workers’ compensation to cover any employees they hire, but your workers’ compensation will not cover true contract labor. However, some employees are misclassified as “contract” labor when they actually are temporary employees. Temporary employees are eligible for coverage under workers’ compensation policies in many cases. It is important to first understand if employees are covered by your workers’ comp policy; if not, then the employer may need a medical coverage addendum to a general liability policy to ensure that anyone working on the job site is covered for medical expenses.
There is also the possibility that a contractor you hire to do work for you has his or her own workers compensation coverage for employees that may be injured. Further, a third-party individual, agency or company may be legally responsible for the costs of an accident. However, until your attorney looks over the situation and you determine how the case will be handled, you can gain a great deal of peace of mind by simply having insurance coverage that will pay for these costs.
There is another reason that it is better for you as the hiring party to have your own insurance, even if your contractors have policies to cover their workers. Insurance compensation normally carried by contractors does not indemnify a property owner once the contractor has moved on to another job. If a contractor wires a building, for example, and faulty wiring injures someone at a later date, the first contractor’s workers’ compensation will not cover this type of injury. Instead, the current contractor must provide coverage or you must provide liability insurance to pay for these injuries.
Contractor’s liability insurance addresses a contractor’s liability when an employee commits a professional tort or design errors or omissions. In the past, contractor’s liability insurance was usually a part of a larger liability policy, but today there are specific policies designed to cover contractors for the actions of their employees.
The problem with relying on an addendum to a traditional liability policy is that coverage is usually limited to the vicarious liability for the errors and omissions of another party rather than professional liability for the contractor. This is a complicated subject that has developed through the court system over the years, and is still misunderstood by many contractors and the people who hire them.
Fortunately, there are contractor’s liability policies to cover almost any type of liability that may exist for a contractor, his or her employees, and even the person or company who hires them. Contractor’s liability policies can be written to include coverage for:
General liability. A contractor can be covered for any actions his or her employees take, as well as his or her own actions. Further, companies that regularly hire contract labor can add policies to their own coverage to protect themselves from any liability arising from the contractor’s actions or that of his or her employees.
Medical expenses. While workers’ compensation is required for all employers, the issues surrounding workers’ compensation and contract workers are complicated. Workers’ compensation does not cover many contract workers for medical expenses, so as a contractor or a person who hires contract labor you must be aware of the limitations of these policies. Ask Gregg Stapp and his team of professionals to help you choose the best policies to cover your responsibility for medical care for contracted employees.
Errors and omissions. When you hire a contractor to perform a job, he or she may do the job to specifications or may fall short. When the contractor falls short of the standard and the result is a lawsuit, it is important for the contractor and the employer to have coverage and protection. Errors and omissions insurance can provide this coverage.
Specialized coverage. If you are an employer or a contractor who deals with specialized types of work, it is important to find coverage that fits your needs. A specialized policy can be created that will cover your particular contractor or employer liability needs no matter what your field of business.
The agents at Gregg Stapp Insurance Services are ready to work with you to plan your contractor’s insurance coverage successfully. With this coverage, you are able to relax in the assurance that anything that happens on the job site will be covered, whether you are a contractor or an employer.
Contact Gregg Stapp Insurance Services today for a free audit of your insurance situation. With the help of our friendly professionals, we can guide to you the right insurance coverage for your needs at a price you can afford.