The Fine Print of a Contractor Insured’s Insurance Policy
A homeowner who is sued by a construction company is entitled to a copy of the Contractor insured’s insurance policy, even if the policy does not specifically address the issue. In New York, a construction project manager (GC) can claim CGL insurance coverage, but only if the GC and the owner agree to procure it in a written contract. It is important to understand whether this type of insurance policy applies to your company.
Coverage of subcontractors may reduce moral hazard and adverse selection issues. If a builder is insured but not the individual employees performing the work, they may feel inclined to cut corners. Furthermore, modern construction relies heavily on subcontractors, as it is difficult to inspect or control quality in certain areas, such as framing, concrete, and soil work. Without a Contractor insured’s insurance policy, the builder may be tempted to cut corners.
A comprehensive insurance policy will cover a wide variety of risks, including property damage from completed operations. The scope of completed operations coverage is broad. This coverage can cover both property damage and personal injury. The policy also covers materials, parts, and equipment used in the work. For example, a contractor could be sued for a faulty installation of a product. That is why a comprehensive insurance policy is necessary for all contractors.
A homeowner can recover damages incurred due to a faulty construction project by requesting an independent inspection. In this way, a homeowner can get a clearer understanding of the contractor’s financial capacity and capabilities. If a contractor has a good reputation, the client will be more likely to hire them again. A well-informed homeowner can ensure that the contractor is performing his job to the highest possible quality. So, make sure to read the fine print of a Contractor insured’s insurance policy.