In the construction industry, there are a number of liabilities that lay in wait. From injuries to employees to pedestrians to issues with foundations and electricity, the risks of working on a construction site are wide-ranging and harmful. With this in mind, it’s important that contractors who operate in the industry are made aware of the importance of errors and omissions insurance.
This kind of coverage, specifically designed for contractors, is a limited program that shouldn’t be confused–but often is–with professional liability insurance, which is intended for contractors involved in construction management and other building work.
Here’s what you need to know when looking into errors and omissions insurance.
What is Errors and Omissions Insurance?
Contractors errors and omissions insurance is a kind of liability insurance for trade contractors. This includes plumbers, electricians, painters, carpenters, and others in the design-build industry. Contractors errors and omissions insurance, also known as E&O, protects the value of the work that is performed if it is somehow damaged due to faulty workmanship that is deemed unintentional. While a commercial general liability policy will protect your company from damages that your work performance causes to other property or persons, your company’s work is left out of a commercial general liability insurance policy.
What Does E&O Cover for Contractors?
Contractors errors and omissions insurance is a limited policy that covers damage to your work, product, or impaired property that happens after a project is completed. This results from negligence on your behalf as well as errors or omissions. In the event that your contracting company is found responsible, errors and omissions insurance would cover the cost to repair or redo faulty work, as well as legal defense costs related to claims.
It’s also important to note that errors and omissions insurance does not cover work done by subcontractors, so what’s covered is only work that your specific company does.
How Much Does Errors and Omissions Insurance Cost?
The cost can vary for errors and omissions insurance as it depends on a number of issues, such as the type of business you run, the industry you’re in, and coverage limits. While the range of pricing can be a bit ambiguous, most small business owners in the contracting industry can expect to pay annual premiums up to about $1,000.
How to Obtain E&O Insurance
Those seeking to get errors and omissions insurance have a few things to consider, including the financial strength of the insurer to the pricing you’re offered. Errors and omissions insurance for contractors is a common product in the industry as risks can range from business to business. It’s an important piece of coverage that can be built out in a personalized way to fit your company’s needs.
About Coast General Insurance
Coast General Insurance Brokers is an insurance brokerage entirely dedicated to business owners. Our agency’s purpose is to partner with our business clients to maintain a pulse on their risks as the business evolves. We match Property and Casualty products and help mitigate claims. Our agency has a dedicated team for Commercial Insurance as well as a team dedicated to Health and Wellness benefits for any size company. Give us a call today at (805) 644-4740 to learn more about what we can do for you.