Ask a few contractors. They’ll nod in agreement: Insurance for contractors seems to be getting more and more expensive, especially in states that side with the worker. Ask an insurance agent and you’ll get an earful of the causes.
Some state legislatures regarding labor disputes are amenable to the employee. It is for this reason that insurance companies will end up paying more in defense and liability costs if an employee is injured at your location. And that is why the premium is higher.
General contractors operating in these places, as well as property managers – such as those who hire subcontractors, among others – should think about purchasing another form of insurance related to occupational injury liability. While it is true that this insurance, also known as action-over-claims, adds to the already high premium costs, in the event that there is a third-party personal injury claim and the commercial general liability policy excludes this type of claim, coverage means everything .
Action-over claims insurance protects you if your employee or subcontractor’s employee suffers an injury, then collects workers’ compensation – then targets a liability claim against the property owner, who then shifts the liability onto you.
Action-About Claim – What It Means
Here’s an example that can help explain the insurance idea.
Do-All Property Management Company signed an indemnity agreement provided by an apartment complex that it was supposed to oversee. The agreement meant that all occupational risks were the responsibility of Do-All.
It so happened that a painter slipped from his ladder. The accident resulted in a serious fracture of both legs. The painter immediately needed money to pay expensive doctor bills, hospital stays and lost income, so he filed a compensation claim with his boss – Do-All’s subcontractor.
Now the painter needed a location for further compensation. He knew that suing his boss was out of the question because he had already collected workers’ and benefits from him. He was advised to file a multi-million dollar lawsuit against the owner of the apartment complex. After being notified of the lawsuit, the owner of the apartment complex contacted Do-All Property Management, which was now responsible for the liability under the indemnity agreement.
If Do-All had the foresight to include action-over-claim coverage in its commercial general liability policy, there would be protection and peace of mind. On the other side of the coin, in the event that there were an action-over-claims exclusion on the Do-All company policy, the management company would be in ‘hot water’ with the need to pay the total out of pocket costs to third parties.
For more information on this important coverage for the general contractor and industries like him or her, please contact an experienced independent agency.