What is Builders Liability Insurance and Why You Need It?

Builders and contractors working on construction sites follow safety norms and standards to avoid workplace accidents, injuries, and damages. Yet accidents may occur in spite of all precautions. Builders Liability Insurance provides coverage to builders and contractors as well as from third party claims resulting due to various types of risks in the form of accidents, thefts, damages, and injuries. Builders Liability Insurance covers a spectrum of construction related insurance packages like Public Liability Insurance, Employers Liability Insurance, Contractors All Risk Insurance etc.

Builders Liability Insurance Covers:

It is beneficial for various trades across construction industry.

Public Liability Insurance

Public liability insurance provides protection from any third party claims made against the businesses. It covers claims when employees, sub-contractors, directors, owners are held accountable for any injury or damage caused to the third party or their properties. It also covers legal costs that have to be incurred for defending the claims. It also covers claims made for defective products. The amount of premium will vary based on different factors like type of business, previous claims, projected turnover, and number of employees. This type of Insurance is useful for tradesman, builders, and contractors.

Employers Liability Insurance

Employers liability insurance provides coverage to employers when any of the employee or workers suffers physical injury or death while on work and it is proved that the injury or death occurred due to employer’s negligence. It covers the employers against all the claims made by injured employee or relatives of deceased employee for compensation. It also covers the associated legal costs. This insurance is suitable for companies having employees or workers. It is mostly issued along with public liability insurance.

Contractors All Risks Insurance

Contractors all risks insurance covers loss or damage to contract works, own plant, hired-in plant, and employee’s tools. The contract works section of this insurance is the main part which provides coverage for only the property on which the work is going on. This insurance will cover loss or damage to contract works or materials when any of the work going on is damaged. It will also cover loss or damage caused to the plant of owner including his machinery, tools, and equipments. Contractors all risk insurance also provides cover for theft, loss, or damage to machinery, equipments, tools which are hired in plants from outside like hire yards. Some insurers also extend this insurance to cover loss or damage to owner or employee’s hand held or power tools. This insurance is useful for contractors, builders, and other trades in the construction industry.

Personal Insurance

Personal Insurance or Personal Accident Insurance is suitable for owners, Directors, sole Traders who in case get injured in an accident and can not work for a certain period of time. In such case they also can not sue their own company. It provides for a 24 hour cover which is not limited to work related accidents. This insurance provides an income during the entire course of period for which insured is unable to work. Personal accident insurance provides three distinct benefits in the form of monthly tax free income, hospital cash, and lump sum (capital benefits). A monthly tax free income means the insured gets a tax free benefit after one month and continues to receive it for entire recovery period. While, hospital cash means the insured gets some amount as expenses towards his stay in hospital. A lump sum means the insured gets certain amount depending on nature of injury. The personal accident insurance relieves the insured from financial worries when he has to rest and recover. This insurance is popular in construction industry.

Machinery Insurance

Machinery Insurance provides protection against any type of loss or damage to most of machineries and equipments used in the construction industry like cranes, earth moving equipments etc. This insurance is especially useful for construction industry where a lot of machinery is used and is exposed to rough field conditions on routine basis.

As there are chances of accidents, thefts, injuries, and damages during construction work, the Builders Liability Insurance provides a much needed protection from claims which can be detrimental to construction businesses. It is also useful to cover third party claims for damages caused to other’s property.

Business Liability Insurance – Types and Importance

Many businesses, especially small businesses, ignore the need of business liability insurance. Though, they take all measures to protect their businesses against risks by taking insurance for physical assets like buildings, stocks and goods, they do not consider protecting their businesses against various possible liabilities they may face. Protecting against all the possible kinds of liabilities is of great importance to a business, given the severity of damage they cause to the business’s reputation, finances and survival.

This article will help you know the various types of insurance policies available and their importance for a business.

Types of business liability insurance
Business liability insurance helps small business owners to secure their businesses by protecting against liabilities like public liability, employer’s liability, professional liability and product liability. Depending upon the type of business you are in, you should purchase the suitable insurance. Following are some of the prime types of insurance suitable to small businesses.

• General liability: This insurance is helpful to small businesses in protecting the owners from claims of liability raised due to property damage or a physical injury caused to the general public, employees or customers resulting from the operational negligence in course of the business. This insurance protects you by compensating for the medical expenses of bodily injuries caused to a person. It also protects you against claims of damage to the third party’s property.

• Professional liability: If you are a software consultant, plumber, chartered accountant or any such professional offering your service for price, the probability of facing professional liability is high. Professional liability protects professionals from risks of liability resulting from loss of data, claims involving malpractice, say, copying of data, breach of confidence, accidental loss of data or inadvertent mistake by your employee. The cost of litigation is too high in these cases and this insurance takes care of those expenses.

• Product liability: When an individual gets injured by using a defective product that you have sold or manufactured, law suit can be filed by this individual against your business. Product liability protects your business from such liabilities by taking care of all the legal hassles and the compensation claims.

Importance of business liability insurance
Business liability insurance protects your business from various liabilities. It is, however, advisable to check the suitability of the insurance with respect to the amount of coverage and the risks involved in the business. Let’s discuss its importance:

• Protection against claims resulting from injuries, damages and malicious ad: Business liability insurance protects your business from liabilities involving bodily injury caused by the operations of your business to any of your customers, employees or general public.

Likewise, if your business causes damage to property, say, while displacing the inventory from/to the warehouse to/from your business, there is high probability that you would face liability for property damage.

Personal injury cases arise when any of the employees gets injured while on job. This insurance protects you against the risk of liability when one is injured in course of the business, say, in accident. In such a case, the insurance protects your business, by compensating for the medical expenses incurred in the treatment of the person.

Another risk is a business advertisement that unintentionally causes resentment. A malicious advertisement brings forth litigation against your business. The insurance protects your business, by awarding the suitable compensation to the aggrieved party in case of such litigation. It also compensates for the litigation expenses.

• Legal fees and medical bills: Business liability insurance finances the medical expenses involved in the treatment given to the injured and the expenses involved in litigation. Even the insurance lawyer would represent you in the court, in the instance of inability to attend the court hearing.

Business insurance is, thus, important to protect your business against various liabilities. It is, however, significant to choose appropriate insurance policy – right cover and the right type taking into account the risks of hazards in your business. Both, inadequate or excess insurance coverage can cause financial loss to your business.