Contractual liability insurance can serve as a safeguard against potential liabilities that a person has assumed when going into an agreement. Contracts play a crucial role in operations across industries and different types of companies. While important, they also create a potential risk for a breach of contract by both parties involved. In many cases, a business with general liability insurance also gets the peace of mind of contractual liability coverage.
What Benefits Does General Liability Provide?
While professional businesses work diligently to meet contract requirements, which helps ensure the company maintains an excellent reputation, the unexpected happens. During the signing of the contract, the paperwork often includes precise wording regarding each party’s responsibility, especially regarding potential damages or monetary losses.
Many people may ask what contractual liability covers. If a breach occurs, the affected party can file a claim. From lawyer fees to court costs, dealing with a lawsuit comes with potentially high costs that could lead to a business failing. A general liability policy helps cover those costs, letting a company continue to move forward without absorbing those expenses.
This type of policy benefits many types of businesses, from construction to property owners. For the former, which often deals with third parties, it protects against the financial consequences of a mistake, such as the incorrect installation of equipment.
What Policies Include Contractual Liability?
Any business in the U.S. must have general liability. This basic policy covers many incidents, such as property damage and injuries. Many policies also include coverage for fraud, false claims, libel, and breach of contract. Unfortunately, these policies do have some limitations.
Specific industries may want to further increase their protection by incorporating an additional policy, such as professional liability or contractor insurance. Businesses also have the option to have add-on endorsements. These endorsements help cover risks associated with contracts. They include a standard endorsement, which requires listing specific contracts to get covered, or a blanket endorsement, which covers all agreements but costs more.
How Much Does General Liability Cost?
Like any insurance coverage, many factors affect how much a policy will cost. The different types of contracts need consideration. From landlords to construction companies to businesses that lease equipment, each has its own risk associated with a warranty. Other elements that will increase or decrease the cost include the number of employees, contract history, use of independent contractors, claims history, and policy limits.
Once a company has a policy, they also have ways to work to reduce costs. Having safety training programs in place and discussing ways to minimize claims with employees may result in lower rates. Additionally, since every business has different needs and nuances, not every policy will meet those. Carefully examining operations helps companies to determine the appropriate limits and ideal coverage.
When it comes to general liability, businesses have many options available. While insurance has a way of getting complicated, many companies offer flexible payment options and tailored policies to help any business maximize its protection while helping to keep costs down.
About Haughn & Associates
Founded by Michael Haughn in 1986, Haughn & Associates is a full-service, family-owned, independent insurance agency based out of Dublin, Ohio. H&A strives to provide the best possible price and unique insurance solutions across a myriad of industries, including construction, IT, Habitation & Commercial Property, Agriculture, and Engineering. Devoted to providing the best of business insurance, life and disability insurance, personal insurance, employee benefits, and bonds, H&A is proof that success lies in long-standing client relations and satisfaction. To learn more about how H&A can be of service to you, contact us at (877) 802-2278.
