Most insurance policies provide coverage for damages to a specific product. But if you want to get extended coverage, you should consider another option. The best choice for those involved in construction projects is contractors risk insurance.
What is contractors risk insurance? Here is the meaning.
Contractors risk insurance is an insurance policy that provides coverage for damaged property and third party injury. It is usually classified under non-standard insurance policies. Many contractors go for this type of insurance.
Damage to property could occur when the building or structure is not constructed properly and therefore prone to collapse.
In the process of constructing the building, an accident may occur thus causing injuries to third parties such as subcontractors. It is only when you have taken contractors insurance policy that these people will be covered. It combines the two risks into one policy.
Contractors risk insurance is a joint insurance policy taken by both the contractor and employer. Both parties have the right to file a claim against the insurance company should damage occur. They are however required to inform the insurer the damage caused or injuries that occurred before the claim is processed.
The biggest advantage of contractors risk insurance is that it ensures that both parties are covered regardless of who caused the damage or type of damage that occurred.
Insurance companies involved in this kind of policy do not have the right to subrogation. This means that should they pay a certain amount of money to one party, they cannot recover the funds from another party involved in the contract.
This policy covers a wide range of risks such as fire, floods, wind and more. Most of the risks are natural calamities which human beings have no control over. It should be noted that contractors insurance policy does not cover damage that occurs due to personal negligence or poor workmanship of the contractor and his laborers.
If you want to buy contractor insurance policy, make sure that you choose a reputable company. This will help to prevent problems when processing your claim. Some companies are known to frustrate customers when they seek to be covered. Avoid such insurers.
The best insurer should have excellent customer support to attend to you anytime you have questions or problems.
In conclusion, contractors risk insurance is important because it allows both parties involved in the contract to process claims so that they are covered. It is good for both contractors and employers because anything can happen in the course of constructing buildings.