Why General Contractors in Massachusetts Need General Liability Insurance
Part of our guide to general contractors insurance in Massachusetts.
Many general contractors in Massachusetts mistakenly believe they don't need General Liability Insurance because they have few employees or work on small projects. However, the reality is that General Liability is a foundational policy that nearly every small business needs, regardless of size or scope. In Massachusetts, the risk of severe nor'easters and coastal flooding, particularly in the Greater Boston area, increases the likelihood of third-party bodily injury or property damage claims. General Liability Insurance covers these claims, protecting your business from financial devastation. With the active plaintiff's bar and above-average litigation rates in Massachusetts, having General Liability Insurance is crucial for general contractors.
General Liability cost for general contractors in Massachusetts
Illustrative monthly general liability estimate for a small general contractor operation in Massachusetts. Actual pricing depends on revenue, payroll, coverage limits, claims history, and carrier. Get a personalized quote to see your real price.
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What General Liability Covers for General Contractors in Massachusetts
General Liability Insurance pays for third-party bodily injury, property damage, and advertising injury claims. For example, if a visitor to a construction site in Springfield slips and falls, General Liability Insurance would cover the resulting medical expenses and potential lawsuit. However, it does not cover workers' compensation claims, which are handled by a separate policy. Additionally, General Liability Insurance does not cover professional liability claims, such as those related to design or construction defects, which are typically covered by a Professional Liability (E&O) policy. In Cambridge, a general contractor might face a claim for advertising injury if their marketing materials inadvertently infringe on a competitor's trademark.
Do General Contractors in Massachusetts Need General Liability?
While General Liability Insurance is not legally required for general contractors in Massachusetts, it is often contractually required by commercial clients, real estate developers, and lenders. Nearly every commercial client in Boston and beyond demands that general contractors carry at least $1 million in general liability and workers' compensation insurance as a condition of signing any construction contract. Without General Liability Insurance, a general contractor in Massachusetts may be unable to secure contracts or projects, potentially harming their business. Furthermore, the risk of severe nor'easters and coastal flooding in the state increases the likelihood of third-party bodily injury or property damage claims, making General Liability Insurance a practical necessity.
A Real General Liability Claim a General Contractor Could Face
A general contractor in Worcester faced a $200,000 claim after a passer-by was injured by a falling object from a construction site. The incident occurred when a strong wind gust from a nor'easter dislodged a loose piece of equipment, which fell onto the sidewalk, striking the passer-by. General Liability Insurance covered the resulting medical expenses and lawsuit, saving the general contractor from financial devastation. The claim highlighted the importance of securing loose equipment and materials on construction sites, particularly in areas prone to severe weather. The general contractor was able to continue operating their business without interruption, thanks to the protection provided by their General Liability Insurance policy.
What General Liability Costs for General Contractors in Massachusetts
The cost of General Liability Insurance for general contractors in Massachusetts can range from $45 to $125 per month, depending on factors such as revenue, payroll, and coverage limits. The state's high workers' compensation costs and active plaintiff's bar can also impact General Liability Insurance premiums. However, general contractors can lower their premiums by bundling General Liability with other core policies, such as Workers' Compensation and Commercial Auto Insurance. Additionally, maintaining a clean claims history and implementing safety measures on construction sites can help reduce premiums over time. In Boston, a general contractor with a high revenue and large payroll may pay more for General Liability Insurance than a smaller contractor in Springfield.
How to Get General Liability in Massachusetts
To get General Liability Insurance in Massachusetts, general contractors should gather information about their business, including revenue, payroll, and coverage limits. They should also compare quotes from different insurers and consider bundling General Liability with other core policies to lower their premiums. In Cambridge, a general contractor can work with an insurance agent to determine the best coverage limits and deductible for their business. By bundling General Liability with other policies, general contractors can often lower their total insurance costs. To get started, general contractors can get a quote for General Liability Insurance today and protect their business from the risks associated with third-party bodily injury and property damage claims.
Frequently asked questions
Will my General Liability premium jump after one claim?＋
Yes. A single claim can increase your premium by 10-20%. However, the impact of a claim on your premium will depend on various factors, including the severity of the claim, your claims history, and the insurer's rating system. Additionally, some insurers offer premium forgiveness or claim-free discounts, which can help reduce the impact of a single claim on your premium.
Can I get a COI same-day for a client?＋
Yes. Many insurers offer same-day certificates of insurance (COIs) for general contractors in Massachusetts. However, the availability of same-day COIs may depend on the insurer and the specific requirements of the client or project. To obtain a same-day COI, general contractors should work with an insurance agent who can facilitate the process and ensure that the COI meets the client's requirements.
Does a sole proprietor need General Liability?＋
Yes. Sole proprietors in Massachusetts are personally liable for business-related risks, including third-party bodily injury and property damage claims. General Liability Insurance can protect sole proprietors from financial devastation in the event of a claim. Although sole proprietors may not be required to carry General Liability Insurance by law, they may still be contractually required to do so by clients or lenders. Furthermore, General Liability Insurance can provide sole proprietors with peace of mind and financial protection, allowing them to focus on growing their business without worrying about the risks associated with third-party claims.
What's not covered by General Liability?＋
General Liability Insurance does not cover workers' compensation claims, professional liability claims, or intentional acts. Workers' compensation claims are handled by a separate policy, while professional liability claims are typically covered by a Professional Liability (E&O) policy. Intentional acts, such as deliberate damage to property, are not covered by General Liability Insurance. Additionally, General Liability Insurance may not cover claims related to pollution, asbestos, or other environmental hazards, which may require specialized coverage. It's essential for general contractors to understand what's not covered by their General Liability Insurance policy to ensure they have adequate protection for their business.
Can I cancel my General Liability policy at any time?＋
Yes. General contractors in Massachusetts can cancel their General Liability policy at any time, but they may be subject to penalties or fees for early cancellation. Additionally, canceling a General Liability policy may leave a business unprotected from third-party bodily injury and property damage claims, which can have severe financial consequences. Before canceling a policy, general contractors should consider alternative options, such as reducing coverage limits or switching to a different insurer, to ensure they maintain adequate protection for their business.
How do I know what coverage limits I need for my General Liability policy?＋
The coverage limits required for a General Liability policy in Massachusetts will depend on various factors, including the size and scope of the business, the type of projects undertaken, and the level of risk associated with the business. General contractors should work with an insurance agent to determine the appropriate coverage limits for their business. The agent can help assess the business's risk profile and recommend coverage limits that provide adequate protection. Additionally, general contractors should consider the requirements of their clients, lenders, or partners, as they may have specific requirements for General Liability coverage limits.
Can I get General Liability Insurance if I have a poor claims history?＋
Yes. General contractors in Massachusetts with a poor claims history can still obtain General Liability Insurance, but they may face higher premiums or more stringent underwriting requirements. Insurers may view businesses with a poor claims history as higher-risk, which can impact the availability and cost of coverage. However, some insurers specialize in providing coverage to high-risk businesses or those with poor claims histories. General contractors should work with an insurance agent who can help them navigate the market and find the most suitable coverage options for their business.
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Other coverages general contractors in Massachusetts should know
This article is for general educational purposes and is not insurance or legal advice. Coverage requirements and pricing in Massachusetts change over time and vary by business. Verify current rules with the Massachusetts Department of Insurance and a licensed agent before purchasing a policy.