Understanding Contractor Liability Insurance

If you’re an artisan contractor, such as an electrician, plumber, carpenter, or HVAC tech, you know things don’t always go as planned. One mistake, a miscommunication, or even something completely out of your control can lead to an unhappy customer. And sometimes, that unhappy customer takes things to the next level with a lawsuit.

It’s a nightmare scenario, but it happens more often than you’d think. A customer claims you damaged their property. Someone gets hurt on your job site. They say your work caused them financial loss. Suddenly, you’re facing legal fees, a potential settlement, and a massive headache. In this blog, we’ll explore what happens next and, more importantly, how to protect yourself.

The Reality of Getting Sued as a Contractor

Lawsuits can hit artisan contractors hard. Even if you didn’t do anything wrong, defending yourself in court isn’t cheap. And if you lose, the costs can be devastating.

Here are some of the most common reasons contractors get sued:

  • Property Damage: A painter spills paint on expensive hardwood floors. A plumber’s pipe installation fails, flooding a home. Mistakes happen, and clients want someone to pay for them.
  • Injuries on the Job Site: A customer walks onto the job site, trips over a tool, and breaks an ankle. Now they’re blaming you and filing a bodily injury claim.
  • Workmanship Disputes: You complete a job, but months later, the customer claims your work led to costly repairs and wants compensation.
  • Breach of Contract: The customer says you didn’t deliver what you promised. Maybe the timeline stretched longer than expected. Maybe they just changed their mind. Either way, they’re holding you responsible.

Step One: Call Your Insurance Company

If you have contractor liability insurance, this is the moment you’ll be glad you got it. The first thing to do is call your insurance provider. They’ll step in and take over.

Here’s what a solid liability policy should cover:

  • Legal Fees: Attorney costs can add up fast, even if the case doesn’t go to trial. Your insurance helps cover them.
  • Settlements & Judgments: If the case goes against you, your policy can cover the amount you owe.
  • Medical Expenses: If someone gets injured and you’re found responsible, insurance helps with their medical bills.
  • Repair Costs: If your work accidentally caused damage, coverage helps pay for repairs.

Step Two: Your Insurance Company Handles the Case

Once you report the claim, your insurance provider starts working on your behalf. They’ll:

  • Investigate the case and see if the claim is valid.
  • Provide a lawyer if needed.
  • Negotiate a settlement if that’s the best option.

This means less stress for you and a better chance of a smooth resolution.

What If You Don’t Have Contractor Liability Insurance?

Without insurance, a lawsuit could wipe out your business. You’d have to cover legal fees, settlements, and damages yourself. And if you can’t pay, your assets (business and personal) could be at risk. That’s why general liability insurance isn’t just a nice-to-have—it’s a must.

Protect Yourself with Contractor Insurance from BME Commercial Insurance

As a contractor, you work hard to build your business. Don’t let one unexpected lawsuit take it all away. The best way to protect yourself is by getting the right insurance before you need it. From commercial auto insurance to workers’ compensation and general liability insurance, BME Commercial Insurance specializes in coverage for artisan contractors. Get in touch today for a free quote and ensure you’re protected.