Public contractor liability refers to a contractor’s responsibility for damage or injury to employees or property while working on a client’s site. Insurance coverage is often required for high-profile projects and to maintain licenses, and can be expensive but necessary for securing clients.
Public contractor liability refers to the responsibility a contractor carries when working on projects located at customer-owned facilities. The extent of responsibility will vary, based on the type of tasks involved in the project. Typically, the contractor’s liability will involve any damage that is sustained as a result of interaction with the client’s employees or damage that occurs to property as a direct result of miscalculations, omissions or actions taken by the contractor. To provide some sort of protection, many contractors carry insurance coverage known as public contractor liability insurance.
Managing the public liability of contractors is often very important to the task of securing clients. In fact, many companies won’t work with a contractor who doesn’t have this type of insurance protection. The potential for someone to be injured in the workplace or to cause damage to land or buildings located on the site is too great to risk working with someone without adequate coverage. For high profile projects, it is not uncommon for clients to require proof of insurance from the insurer, with this documentation not only confirming the existence of coverage but also the amount.
Additionally, some local jurisdictions may require contractors to maintain this type of liability coverage in order to maintain their licenses or certifications to work in the area. Significant fines can be invoked if a contractor is without coverage, either for allowing it to lapse or for not ensuring safety. Along with fines, the issuing agency may have the right to revoke a contractor’s license when he or she fails to maintain contractors’ public liability insurance, requiring the individual to secure coverage and go through the licensing process again.
As with most types of public liability insurance, public liability coverage for contractors can be quite expensive. The benefit is that having coverage can pave the way for many deals that would otherwise be impossible to obtain. Also, an incident of needing to file a claim on coverage often pays more than the cost of premiums for several years. Without some form of public contractor liability coverage, the chances of succeeding in this field are slim and the potential for sustaining a crippling financial loss is greatly increased.
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