No matter how hard you try to keep your business out of the courtroom, there comes a time when your company gets dragged in there anyways. It doesn’t matter if you are a small one man shop or if you have a large company, someone out there might think you caused them or their business financial harm.
Contractors Errors & Omissions coverage is there for you when one of your customers suffers a financial loss due to a mistake or a deemed incompetency of your business. It doesn’t matter if you’re at fault or not at fault, the legal arenas cost money to fight in, and that is where your coverage would respond. This coverage would be used to pay for things such as lawyer fees, settlements, and court fees. It doesn’t take a large imagination to picture how large those bills could be if it was a drawn out court case.
Most commercial general liability policies will have exclusions in their policy for “your work”, “your product”, and “impaired property”. This leaves you with a gap in your insurance if you don’t have the proper coverage that you need. Hopefully after reading this article you will have a good understand of how a contractors errors & omissions coverage could help your business.
Why Would Small to Medium Sized Contractors Need This?
When a person or a company feels they have been financially wronged, they don’t usually take into account how big the contractors business is. They might even consider it their “duty” to take you to court so that it doesn’t happen to the next person too. Read more about why it’s important that contractors have commercial insurance.
What Kind of Financial Damage Can Contractors Cause?
Most contractors will immediately assume that most of the damage they could possibly cause would be fixable by them. Either they lose some money fixing their mistake or they just don’t make as much on the job as they expected.
The types of financial losses where a Contractors Errors & Omissions coverage would come into play usually involve allegations of negligence and errors in your work. This doesn’t mean damaging their floor or scratching their walls.
It could mean something simple such as faulty joints on your plumbing that caused a plumbing leak. The Errors & Omissions coverage would respond to pay for the correction to the joints. If this was on a new house build, those numbers could add up quickly.
There could also be more expensive situations such as construction delays or budget overruns. If you are working for larger companies, construction delays could delay them from opening, and cause financial hardship to them or worse.
The Final Word
Contractors Errors and Omissions coverage sounds complicated, but when you look at it from a high level perspective, it’s there to fill in the gaps in your CGL for faulty workmanship, material or products, including resulting consequential loss.
Contact us today to find out how much it would cost to add this coverage to your policy, or if you are already a “Plus Package” subscriber, you already have this coverage built in.