Contractor insurance is a specialist insurance cover taken by contractors to shield them against liabilities arising due to breach of contract terms, structural damage or faulty execution of contract terms by the contractor. It further covers losses due to lawsuits and other related damages to the contractor. The main area of specialization in contractors insurance is construction companies. To this extend, contractors insurance covers the liability to the contractor arising during construction. This includes structural damages to other building and or structures not included in the construction agreement. In such a case, the damages likely to arise in such structures are insured against under the contractors insurance.

To some degree, contractors insurance covers professional indemnity for both the contractor and the contractor’s agents. In such a case, it guards the contractor against losses and injuries to third parties and their property whilst around the construction site. It also covers bodily injuries on employees of the contractor arising during the process of execution of contractual procedures. In the case where an employee dies in the process of executing the contract, the appropriate payments are compensated to his/her family depending on the agreement terms. Some complicated cases which may happen during the coverage period, like mass deaths and such incidences are also compensated by the cover. Incidences that do dot emanate from the contract or related dangers are not included in the terms but can be added as a tag along policy to the contractor insurance cover.

The cover can be extended to cover extreme cases such as those of losing everything such as the contract, the implements used and such extreme cases. When the danger covered against happens, the insurer will have to pay for the loss. Due to the risk that has been transferred to them, the insurance company takes precaution by charging the appropriate premium, putting into consideration all the possible factors that could arise. They calculate probabilities of several incidences taking place and charge them accordingly.

In cases where the risk that has been transferred to the contractor insurance company is too high for them to bear, they take an extra precaution by taking up an additional insurance cover from insurers. Under such circumstances, when a loss of a certain amount occurs, it is usually shared between the direct insurer and the insurer according to some preset terms. Other than the normal events covered against in the contractors insurance, other natural calamities such as earthquakes can also be covered against in comprehensive contractor insurances.

Author's Bio: 

Katrina Watson recently started working as an equipment advisor and focuses on adding value to the highly complex issues for contractor insurance For more information please visit: http://www.heliosprotection.com/