Contractors Protective Liability Insurance
Working in the construction industry has its benefits and its challenges. Anyone who works as a contractor must have specific insurance in place when they accept a job. Contractors must have standard policies that cover workers’ compensation, commercial auto, and contractors general liability (CGL) insurance. Another option that has become part of the norm is owners and contractors protective liability coverage (OCP).
The experienced team at IPA Risk Management, LLC, will conduct a detailed review of your business to determine the coverage that offers the best protection. Call our office in Rochelle Park, New Jersey at 201.797.1084 to schedule an appointment with a member of our team. There’s nothing we can’t cover for your business so that you are protected from the most common and uncommon hazards.
An extra layer of protection
Contractors’ protective liability insurance is an extra layer of protection and should never be used in place of contractors’ general liability insurance. Contractors’ protective liability insurance provides the following:
- A standalone policy that is specific to the project
- Meant to protect one person, typically an owner or contractor
- Specifically for the tasks performed by the contractor named on the policy declarations page for an owner
When you acquire this policy, you will be protecting yourself and the project owner from property damage and bodily injuries that stem from the following circumstances:
- The vicarious liability of the project owner that is connected to the work of the contractor
- The omissions or acts by the owner of the project in the supervision of the contractor
It’s important to note that even though this policy is purchased by the contractor, it only protects the project owner or whoever is named as the insured on the policy. The policy protects the owner from any liabilities that the work of the contractor might cause.
What isn’t covered?
A contractor’s protective liability insurance policy will not cover any claims that stem from the negligence of the project owner. However, if these negligent acts occurred in the direct supervision of the contractor, the policy should be able to cover them. It is important to note that the policy only covers issues that occur during the life of the policy and at the project site that is listed on the declarations page.
Advantages of a contractor’s protective liability policy
The biggest advantage of this type of insurance policy for the owner of the project is that the coverage is only for the owner and no one else. The covered entity named in the policy is the recipient of primary coverage via separate, dedicated coverage limits.
The advantage of having a contractor’s protective liability policy for the contractor is that their premiums for their other insurance policies will not increase if there is a claim. If the contractor only carries contractor general liability coverage and there is a claim, the premium will increase when the next policy period begins.
Actions committed by a contractor that can be attributed to an owner
The main reason for the contactor’s protective liability coverage is to protect against claims made stemming from actions committed by a contractor that can be attributed to an owner. Examples of these actions include the following:
- The project involves work that is inherently dangerous (such as excavation or use of explosives)
- The work involves duties that, under local, state, or federal law, a project owner cannot delegate to anyone else
- The work that causes damage or harm is the direct result of an incompetent contractor being hired negligently
There are no requirements as to the type of work being performed or the location of the project when applying for a contractor’s protective liability policy. This means that the work can be farming, commercial, or personal in nature. The only requirement that must be met is that vicarious liability is present between the contractor and the project owner or the contractor and any subcontractors hired for the project.
If you have questions about the types of insurance policies you should have as a contractor, be sure to contact the experienced team at IPA Risk Management, LLC. We will thoroughly review your business practices and inherent risks before writing a policy that best meets your needs and coverage limits.
Schedule a Consultation with a Broker Today
Working as a contractor comes with a lot of risks. Make sure you limit those risks and enjoy the rewards by having the proper insurance coverage in place before you accept a new project. One such policy is the contractor’s protective liability policy. The team at IPA Risk Management, LLC, can write this type of policy for all of your projects so that the owner is always protected. Call our Rochelle Park, New Jersey, office at 201.797.1084 to schedule a consultation with a broker today.