General contractors insurance NY is a mandatory requirement for all contractors working in the state of New York, as the contractors will be held responsible for everything that happens on the job site. While General Liability, Workman's Compensation, and Disability are standard on nearly every contractors insurance policy, additional coverage's may be necessary to ensure sufficient protection, particularly in regards to Third Party coverage that extends to any subcontractors that may be hired. Both occurrence-based and claims-based policies are available, and selecting the right policy can be as important as selecting the right coverage's.
One of the most important things to understand in regards to general contractors insurance NY is that the standard coverage's of General Liability, Workman's Compensation, and Disability do not extend to subcontractors hired to complete specific tasks. This means that damages caused by hired tradesmen, such as plumbers or electricians, cannot be claimed against the insurance provider, which leaves the general contractor solely responsible for any compensation to be paid to the property owner. Third Party coverage can be added to standard insurance policies, however, which will include hired tradesmen in the coverage umbrella, although this coverage will come with an additional cost. Further protection can also be purchased through unlimited contractual liability coverage, which offers the assurance that all damages will be covered regardless of the cause. The drawback to unlimited coverage, however, is that premiums with this coverage will be significantly higher.
The one item that should not be part of general contractors insurance NY policies is a designated work endorsement. This is because a designated work endorsement limits coverage to the specific class of the hired tradesman. A designated work endorsement for a plumber, for example, will only cover the damages caused by the plumber in the area of plumbing. This means that even should the plumber be skilled in masonry or roofing, damages caused while performing either of these tasks will be excluded from coverage simply because they are outside the specific work endorsement.
General contractors insurance NY can be purchased with either claims-based or occurrence-based coverage. Of the two, occurrence-based is the most recommended. Occurrence-based coverage means that the insurance needs only to have been active when the incident occurred, and coverage remains in effect even if the insurance has since been dropped. Claims-based insurance, on the other hand, requires that policies be active at the time that the claim is made, which can make it necessary to purchase renewals even after the job has been completed. Claims-based policies are considerably less expensive than occurrence-based insurance, however, which can make it more affordable for small or new general contractor services.
General contractors insurance NY is mandatory in the state of New York, and highly recommended regardless of state regulations. Choosing the cheapest insurance policy can be financially devastating, however, as standard policies often limit coverage in regards to subcontractors and job classes. While the addition of these coverage's will result in a higher premium, the added protection can prevent financial devastation in the event of a lawsuit resulting from a claim. General contractors are responsible for every incident that happens on their job site, which makes general contractors insurance NY the one business purchase that contractors cannot afford to be without.
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