Ask some contractors. They’ll nod their heads: Contractor insurance seems to be costing more and more, particularly in states that are on the worker’s side. Ask an insurance agent and you will know the causes.
Some state legislatures when it comes to labor disputes are biased to the worker. It is for this reason that insurance companies will end up paying more in defense and liability costs if there is an injured worker on their site. And that is why the premium is higher.
General contractors operating in these locations, as well as property managers, including others like them who hire subcontractors, should consider getting another form of insurance regarding worker’s liability. While it is true that this insurance, known as claims per action, adds to the already high premium costs, should there be a third party injury claim and the commercial general liability policy excludes this type of claim, the coverage is everything.
Claims claims insurance protects you if your worker or subcontractor worker is injured and then collects worker’s compensation benefits, and then goes to a liability claim against the property owner, who then returns liability to you .
Claim of action on: what it means
Here is an example that can help explain the idea of insurance.
Do-All Property Management Company entered into a severance agreement provided by an apartment complex that it was assigned to oversee. The agreement meant that all occupational hazards were the responsibility of Do-All.
It so happened that a painter slipped off his ladder. The accident caused a serious break in both legs. The painter needed money right away to take care of expensive doctor bills, hospitalizations, and lost income, so he filed a workers’ compensation claim with his boss, the Do-All subcontractor.
Now the painter needed a place for further compensation. He knew that suing his boss was out of the question because he had already collected workers’ compensation benefits from him. He was advised to file a multi-million dollar lawsuit against the owner of the apartment complex. Once the apartment complex owner was notified of the lawsuit, he contacted Do-All Property Management, who, according to the settlement agreement, was now liable for liability.
In the event that Do-All had the foresight to include action claims coverage on its general commercial liability policy, there would be protection and peace of mind. On the other side of the coin, in the event that there was an action claims exclusion on the Do-All business policy, the management company would find itself in ‘hot water’ with the need to pay the full disbursement to a third. charges.
To learn more about this important coverage for the general contractor and industries like it, contact an experienced independent agency.