General contractors insurance is a requirement in the state of New York for anyone acting in the construction field, and the insurance must be active during the entire period in which work is being done. This is because contractors are held responsible for everything that happens on the worksite, from the beginning of a job until it is complete. Choosing the cheapest general contractors insurance NY is not always the wisest decision, however, as many policies leave holes in coverage that can be financially devastating in the event of a lawsuit.
General contractors insurance NY is required by law to provide three types of coverage:
• General Liability
• Workman's Compensation
• Disability
However, these coverage's are not extended to subcontractors unless they are specifically added to the policy. The need for this extended coverage comes into effect when a general contractor hires specific tradesmen to do work on a project they are in charge of, such as an electrician or a plumber. Without the extended coverage, any damages caused by the tradesmen will not be covered by the general contractors insurance, which can be as financially devastating should a lawsuit be filed. The exclusion of this extended coverage is often the reason behind many of the low rates of general contractors insurance quotes.
To protect against the financial consequences of uncovered damages, there are a number of specifics that general contractors insurance NY should include and these are listed below:
• Third party coverage, which extends coverage to subcontractors
• Unlimited contractual liability, which ensures that all damages will be covered
• Pollution coverage, which covers the risk of exposure to drywall chemicals or lead-based paints
Another important thing to remember is that coverage should be occurrence-based, rather than claims-based. Occurrence-based means that claims are covered regardless of when they happened, even if it is long after the job has been completed, and even if the insurance has since been dropped. Claims-based coverage, on the other hand, requires that insurance be active at the time the claim is made.
The one thing that should not be specified in a universal contractors insurance NY policy, however, is a designated work endorsement. This is because a designated work endorsement means that coverage will apply only to work that is done within the class of the contractor. A designated work endorsement for a hired electrician, for example, will provide coverage for only the work that is done in the electrical field, while excluding coverage for any plumbing, masonry, or other tasks performed by the electrician.
General contractors are in charge of every aspect of a building project, whether the project is new construction or simply a remodel. Because they are also held responsible for everything that happens on a worksite, general contractors insurance is crucial. However, the cheapest insurance available is not necessarily the most recommended, as many policies leave holes in coverage that can lead to financial devastation. General contractors insurance NY has made liability, worker's compensation, and disability insurance mandatory, but it is up to the contractors themselves to ensure coverage for all areas of risk, including subcontractors and incidents such as pollution. While the additional coverage will incur an additional cost, the security of the protection makes the purchase of added coverage a sound business decision.
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