5 common losses seen in construction and general contracting : 5 part series part 1 of 5
General Contractor and Construction Insurance: Workers’ Compensation & Employee Injury Claims
For general contractors and construction company owners throughout Colorado and even nationally, employee injuries are one of the most significant risks a construction business can face. Construction work involves ladders, power tools, heavy materials, vehicles, elevated work areas, and constantly changing jobsites. Even contractors with strong safety programs can experience an unexpected workplace accident.
Understanding how workers’ compensation fits into a contractor’s overall insurance program is an important part of protecting the business.
It’s also expected by most if not all states and monitored that it’s in place. Penalties can be applied and/or or force-placed insurance by the state with a deadline to have your own policy in place of to mitigate continuous fees.
1. Falls and Jobsite Injuries
Falls are a serious exposure for contractors working on residential and commercial projects.
Example: An employee falls from a ladder while performing interior work and suffers a serious injury requiring medical treatment and time away from work.
Workers’ compensation is designed to address covered employee injuries arising out of employment, including applicable medical expenses and lost wages.
2. Injuries From Tools and Equipment
Construction employees regularly work with power tools, saws, compressors, lifts, and other equipment. Improper use, equipment failure, or simple accidents can result in significant injuries.
Example: An employee suffers a hand injury while operating a power saw on a remodeling project.
A contractor’s safety program can reduce the likelihood of these incidents, but insurance remains an important part of the overall risk-management strategy.
3. Lifting and Repetitive Injuries
Not every workplace injury happens in a dramatic accident. Construction employees can also experience injuries from lifting heavy materials, repetitive movements, or physically demanding work.
Example: An employee develops a serious back injury after repeatedly lifting heavy construction materials over an extended period.
These types of claims are another reason contractors should understand their workers’ compensation obligations and insurance requirements.
4. Subcontractor and Employee Classification Issues
General contractors frequently work with subcontractors, independent contractors, and temporary labor. How those workers are classified and whether they carry their own insurance can become important when a claim occurs.
Contractors should have a consistent process for collecting certificates of insurance and reviewing subcontractor coverage. Depending on the circumstances, a contractor could potentially face significant exposure if a subcontractor does not maintain appropriate insurance or if a worker is determined to be an employee.
5. Serious Injuries Can Affect More Than One Coverage Line
A major construction accident may involve more than workers’ compensation.
For example, an accident could involve an employee injury, damage to a customer’s property, damage to equipment, or an allegation that the contractor was negligent.
That is why contractors should look at their insurance program as a whole rather than purchasing each policy independently.
Insurance Coverages General Contractors Should Consider
Depending on the contractor’s operations, an insurance program may include:
Workers’ Compensation
General Liability
Commercial Auto
Inland Marine
Builders Risk
Umbrella or Excess Liability
Employment Practices Liability
Contractors Equipment coverage
The appropriate combination depends on the contractor’s employees, subcontractors, vehicles, equipment, project types, and contracts.
Protecting Your Colorado Construction Business
A strong safety program is the first line of defense against workplace injuries. Insurance provides another important layer of protection when an unexpected accident occurs.
If you operate a general contracting business in Arvada, Westminster, Wheat Ridge, Golden, or throughout the Denver metro area, reviewing your workers’ compensation and broader insurance program can help identify potential gaps before a claim happens.
At CIB National Insurance & Consulting, we help contractors evaluate their exposures and develop insurance programs around the way they actually operate.
Have a new project coming up or want us to review your current contractor insurance program? Contact our team today.
Coverage varies by policy, carrier, and insured operations. This article is provided for general informational purposes only and does not constitute insurance, legal, or professional advice or guarantee coverage for any specific claim or circumstance.