Commercial contractors
Commercial contracts specify what you must carry, and those specifications are usually higher than anything the state requires. Getting the programme right before you bid is the difference between a profitable job and an uninsured one.
A commercial contract will typically specify general liability limits, require that the owner and the general contractor be named as additional insureds, require a waiver of subrogation, and demand proof of workers compensation. State minimums are usually well below what a commercial agreement asks for, so the contract is the binding constraint.
This is why signing a contract before checking your programme is expensive. Agreeing to carry two million in limits while holding one million does not create coverage. It creates a breach of contract at the exact moment you can least afford one, and it is discovered when a claim arrives rather than when the contract is signed.
As a commercial contractor you are usually managing other trades as well as doing your own work. Every one of those trades is a potential liability if they are uninsured, because you controlled the site and you allowed them on it. Collecting certificates is the standard practice, but collecting them is not the same as checking them.
The three things to verify are that the certificate is current, that the limits meet your agreement, and that you are named as an additional insured where the contract requires it. An expired certificate in a folder is worse than no certificate at all, because it creates the appearance of diligence without the substance.
Eight coverages cover almost everything a construction business faces. They do different jobs, and buying one does not cover the others.
Third party injury and property damage caused by your operations.
Medical care and lost wages for your own injured employees.
Vehicles used in the business, including owned, hired and non owned.
Your tools and equipment against theft, damage and loss.
The project under construction, plus materials on site.
A guarantee of performance or payment, not a transfer of risk.
Extra limits above your underlying policies once those are used up.
Claims from design work and advice, which general liability excludes.
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Tell us your trade, payroll and the states you work in. A licensed specialist will come back with real numbers.
