General liability insurance is crucial for protecting contractors against the high risks inherent in construction work. This essential coverage helps pay for property damage, bodily injuries, and legal claims from clients or third parties.
For contractors in Colorado, carrying adequate general liability limits is key to safeguarding your business from potentially devastating losses. This comprehensive guide covers everything Colorado contractors need to know about securing the right general liability policy.
Overview of General Liability Insurance
General liability insurance covers expenses and legal fees arising from:
- Bodily injury or death caused to a third party
- Damage to a client’s or other third party’s property
- Personal injury such as slander, libel, or mental anguish
- Medical payments for injuries on your worksite
Policies have liability limits, usually $1 million to $2 million, that cap how much the insurer pays per claim or incident. Higher limits are available for an added premium.
This essential coverage is usually required by commercial leases and many client contracts. Carrying adequate general liability protection is a must for contractors in Colorado and nationwide.
Why Colorado Contractors Need It
Construction projects involve major risks. Without proper general liability insurance, just one incident could put your business under.
Some examples of costly claims in Colorado that general liability helps cover:
- An injury to a passerby from falling debris or tools
- Vandalism damage to a home under construction
- A subcontractor’s mistake damages the client’s property
- Faulty work leads to a fire or other property damage
You may be diligent about safety and quality work. But mistakes and accidents happen in construction. Don’t put your company at risk – general liability insurance provides an essential financial shield.
Required General Liability Limits in Colorado
The State of Colorado does not dictate specific general liability insurance requirements for contractors. However, most commercial property managers and construction clients require contractors to carry this essential coverage.
Typical general liability minimums range from $500,000 up to $2 million in required limits. Carrying at least $1 million in coverage is recommended for most small to mid-sized construction firms. Higher limits apply to large general contractors working on major commercial projects.
Make sure you understand the specific general liability insurance requirements for each client or property site. Not carrying adequate coverage could preclude you from taking on certain jobs.
Cost of General Liability Insurance in Colorado
In Colorado, the average cost of general liability insurance for contractors ranges from $600 – $1,800 per year based on these factors:
- Your location and the type of construction you perform
- Gross annual receipts revenue
- Desired policy limits
- Years in business and experience
- Claims history and safety record
Carrying only the state minimum general liability coverage can seem attractive from a cost standpoint. However, those low limits may not adequately cover major property damage or injury claims. It’s wise to carry robust limits even if it costs somewhat more upfront.
Bundling General Liability with Other Policies
Many Colorado contractors bundle their general liability coverage with other essential policies:
Commercial property insurance – Covers your office, equipment, tools, and job site materials against fire, theft, vandalism, and natural disasters.
Workers’ compensation – Pays for medical treatment and lost wages if employees are injured on the job. This is required in Colorado for contractors with 1 or more employees.
Inland marine insurance – Protects contractor equipment that travels to different job sites against loss or damage.
Commercial auto – Covers vehicles used for business purposes. Required in Colorado if you have company vehicles.
Packaging multiple policies together often comes with bundling discounts, allowing you to save 10% or more on your overall insurance premium.
Finding the Best General Liability Insurance
Follow these tips when purchasing general liability coverage:
Compare quotes from multiple top-rated insurers to find the best rate based on your specific risks. Rates can vary widely between providers.
Ask if professional associations you belong to provide discounted group policies.
Look for contractor-specific policies that bundle general liability with other essential coverages.
Work with an independent agent or broker who can shop multiple carriers to get you the optimal general liability insurance policy.
Review policy exclusions carefully to avoid any unpleasant surprises in the event of a claim.
Make sure you meet all insurance requirements specified in client contracts before starting work.
Protecting your construction business starts with securing proper general liability coverage limits. Don’t cut corners when it comes to safeguarding your company’s finances from the high risks inherent in construction work.
General liability insurance provides contractors in Colorado protection against:
- Property damage and injury claims from clients
- Legal defense and settlement costs
- Potential business bankruptcy after a major lawsuit
Carrying adequate general liability coverage limits is essential and often required by contract. Work with a broker or agent to secure a competitively priced policy that protects your construction firm.
Common Questions About General Liability Insurance in Colorado
How much general liability insurance do most contractors carry in Colorado?
Most carry between $500,000 and $2 million in general liability limits. For large general contractors, limits of $2 million to $5 million are often recommended.
What does the general liability insurance cover for my construction business?
It covers third party property damage, bodily injuries, personal injuries, and legal defense costs. Exclusions like auto, workers’ comp, or professional services may apply.
Can I get by with just the Colorado state minimum general liability coverage?
The state has no minimum, but carrying only $500,000 leaves you vulnerable. It’s wise to carry at least $1 million to $2 million in coverage.
Will I get a discount if I bundle my general liability with other policies?
Yes, you can often save 10% or more on your overall insurance premium by bundling general liability with commercial property, inland marine, auto, and workers’ compensation.
What documents should I review before getting a general liability insurance quote?
Have details on your payroll, subcontractors, past claims, and annual revenues as well as copies of client contracts handy. This allows for an accurate quote.
How can I get the lowest premiums for general liability insurance in Colorado?
Compare quotes from multiple insurers. Consider higher deductibles and limits. Improve site safety. Join trade groups with discount programs. Maintain good credit and claims history.
Following these best practices allows Colorado contractors to secure comprehensive general liability insurance at the most competitive rates. Protect your business and avoid needless risk by carrying adequate coverage for your construction firm.
Insurance for General Contractors in Colorado
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