Why You Need Texas Contractors Insurance

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The Importance of Contractor Insurance

Contractors in Texas need to have contractors insurance to do business. Contractors who have specialized in the building needs to have proper policies that can protect them and their employees. In the event of accidents occurrence, you need to the right insurance company to protect yourself, your clients, your job sites and your workers from injuries and losses.

Having Texas contractor’s liability insurance enables your company to be a step closer to protecting your business in case an accident happens. The necessity of having insurance doesn’t matter whether one is a commercial builder or a small builder, but it is just a key to ensuring that you have the right amount of coverage. Both the small contractor and large contractor requires the right type of insurance coverage that fits their needs.

Businesses are characterized by the dynamism of changes, and hence it is advisable to always stay on top of your risk management to make sure that your business keeps going. This insurance cover is important to both the company, your family and employees since you have all been working for years to build the company. Accidents are always unplanned and hence right insurance protects you from unexpected risks. However, you need to make sure that you purchase your contractor insurance from a state licensed provider and also ensure that you have the right coverage for your specific region.

General Liability  Insurance Protects Your Company

You should review and understand all your policies, talk to a licensed insurance provider and liaise with him. You don’t always want to settle for the lowest quote, but look for the best one that fits your needs. Types of Texas Small Business Insurance: Texas Liability Insurance Texas Liability Insurance protects your company if sued for injury or property damage to a third party. The insurance covers on-site accidents; also it covers losses that occur from your products or services. The coverage will pay for the medical payments, damage costs, and litigation costs associated with the liability suit.

Lawsuits tend to be expensive, and you always want to try your best to avoid them. Having the right liability policy will help you during a trial. If you don’t have the proper coverage or the right amount of coverage, then you are responsible for paying for all the costs and damages that occur because of the lawsuit. Your insurance company will only pay out damages up to your policy limit, and you are responsible for the difference. Higher risk industries require that you have higher coverage then raise your insurance premiums.

It is important to team with an Insurance Broker that is knowledgeable in your industry and can work with you to get the right coverage for you. Texas has laws that tell you how much insurance you need to have to cover your clients and employees. You want to make sure you know these laws inside and out and if you can’t find the information, contact your insurance broker for all the information you need.…

How Contractor Bonds protect Construction Companies

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In every construction, contractor bonds provide general contractors, developers, and owners with a surety that all the parties involved will honor their promises and the funds will be available for the other entity. Hence, the bond protects against financial loss to the construction company and the developer. Contractorbond.org – Contractors License Bond California  is an example of a trusted bonding company who offers their clients competitive pricing. Bonds also protects the assets of the investor against non-completion of the project. There are different types of bonds; performance bonds, bid bonds, and payment bonds.

* Performance bonds – the contractor uses the bond to guarantee that the project will be completed in time and by the terms. In case of defaults, the other party has the right to contact the surety.

* Bids bonds – The bond protects the owner. If the bid is not respected by the contractor, the owner has a right to sue both the contractor and the issuer of the bond.

* Payment bond – The payment bond guarantees that payments due to all subcontractors and suppliers will be horned on time.
How Contractor bond protect construction companies
Due to the assurance provided, below are some ways on how contractor bonds protect construction companies.

Shows financial strength

Contractors are required to show financial strength. This is beneficial to the contractor because he or she can get more significant projects and minimizes the risk of getting involved with an untrustworthy developer. To obtain the bond, bonding agents require a positive net income, shareholder equity growth, and operational cash. They also require a pipeline of your current, past and pending projects.

Guarantee public contracts

Every contractor’s dream is to have a large public project. This guarantees financial freedom and protects construction companies from collapsing. But for a project above specific dollar amount, government institutions need bonding to protect the taxpayer money, and for the contractor to guarantee timely project completion. Keep in mind that a large government project might require a general contractor, several subcontractors, and subcontractors may hire small project companies. All these projects specify the minimum bonding amount and documentation. Rough construction companies may not meet the required standards for consideration. Hence they cannot apply for these big projects.

Attracts Serious employees, suppliers and subcontractors

Numerous construction companies have barriers to entry. Most of these entries are forgotten as soon as they are formed, leaving employees, independent contractors, and suppliers suspicious of the construction companies they have never engaged with before. If a construction company fails to honor its payment promises, the laborers, and the subcontractors have a remedy of payment protection. So, by having Contractor bond, the construction company is protected from unserious employees, and only attracts people and businesses that are needed for project completion.

Protects against contract disputes

In most cases, a developer might dispute the delay cause, the percentage of completion or any other form of dispute. Due to the dispute, the developer might withhold some payments. Without any bonding, the only option of the construction company is to head to court. But with a contractor bond, as a construction company, you are protected. The bond helps to resolve any form of conflict before escalating. It also prevents expensive delays that might be unnecessary.…