If you are a Building Contractor or building a home right now, you won't want to miss this message!
No doubt about it, this is a tough time to be a Building Contractor.
Supply delays, the rising cost of building materials, high interest rates on building loans... the list goes on!
When the economy is tough, builders simply aren't as busy and that means less income.
In times like these we're all looking for ways to cut back but there are some places where cutting back could end up costing more than you imagine. *Spoiler alert: Insurance is one!*
These days many contractors are cutting costs by not carrying Professional Liability Insurance. As you are reading this only 1 in 4 building contractors currently have Professional Liability Insurance.
On paper it may seem like a good place to cut in the short term, but in the long run it could end up costing them BIG.
A common misconception among construction professionals is thinking they aren't at risk of being sued for economic loss, particularly if they are a contractor who doesn't do design work. They may think that their position doesn't leave them vulnerable to negligence, errors, or omissions claims and that their General Liability Coverage for bodily injury and property damage is sufficient. Unfortunately that's incorrect.
Contractors DO have a professional liability exposure if they're leading pre-construction services or if they are:
Major Trade Contractors engaged in the planning and design phases of a project
At present Professional Liability claims in construction are relatively infrequent which is probably why they think cutting back on this area of coverage could be ok, but the potential severity and likelihood of more claims in the future are steadily growing.
In fact, Professional Liability claims could incur from cost overruns due to scheduling delays, loss of income, business interruption, owner's consequential damages, etc and as we all know sympathetic juries are awarding higher damage amounts than ever-- so is this a risk worth taking?
It's so important for Building Contractors to consider reaching out to an insurance agent who can help them to obtain the best policy at the lowest price-- that's why we're here!
And if you're a consumer considering hiring a contractor make sure the one you choose is properly insured.
As always, we are here to help you navigate these tough economic times and to advise on ways to save without opening up your risk exposure.
If you are a Building Contractor we would love to talk with you about your coverage anytime.
Simply click the link below to schedule a free consult or call our office at 337.291.0018.