Understanding Contractor Action Claims

Ask some contractors. They’ll nod in agreement: Contractor’s insurance seems to cost more and more, particularly in states that side with the worker. Ask an insurance agent and you’ll get a ton of information on the causes.

Some state legislators when it comes to labor disputes are biased towards the worker. It is for this reason that insurance companies will end up paying more in defense and liability costs if there is a worker who is injured on their site. And that is why the premium is higher.

General contractors operating in these locations, as well as property managers, among others who hire subcontractors, should consider obtaining another form of insurance regarding workers’ compensation liability. While it is true that this insurance, known as action claims, adds to the already high premium costs, in the event there is a third party injury claim and the commercial general liability policy excludes this type of claim, the coverage it’s everything.

Action claims insurance protects you if your worker or the subcontractor’s worker is injured and then collects workers’ compensation benefits, then focuses on a liability claim against the property owner, who then returns liability to you. to you.

Action claim on: what it means

Here is an example that may help explain the idea of ​​insurance.

Do-All Property Management Company put their signature on a severance agreement provided by an apartment complex they were assigned to oversee. The agreement meant that all occupational risks were the responsibility of Do-All.

It so happened that a painter slipped from his ladder. The accident resulted in a serious fracture of both legs. The painter needed money right away to pay for expensive medical bills, hospital stays and lost income, so he filed a workers’ compensation claim with his boss, Do-All’s subcontractor.

Now the painter needed a place for further compensation. He knew that suing his boss was out of the question because he had already collected workers’ compensation benefits from her. He was advised to file a multi-million dollar lawsuit against the owner of the apartment complex. Once the owner of the apartment complex was notified of the lawsuit, he contacted Do-All Property Management, who, according to the indemnity agreement, was now responsible for the liability.

In the event that Do-All had the foresight to include stock claims coverage in its commercial general liability policy, there would be protection and peace of mind. On the other side of the coin, in the event that there was an action claims exclusion on the commercial Do-All policy, the management company would find itself in ‘hot water’ with the need to pay third parties out of pocket in full. . loads

To learn more about this important coverage for the general contractor and industries like him or her, contact an experienced independent agency.

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