Contractors employ a wide range of skilled and unskilled personnel to work at construction sites. Although the risk of suffering injuries caused by falling objects as well as slips and falls is high, some of the workers employed by contractors may be under insured or even uninsured. This makes the contractor liable if any of the employees suffer work related injuries. According to the Occupational Safety and Health Administration (OSHA), the average number of injures reported at construction sites stands at about 24,800 every year. In addition, 36 people lose their lives annually due to injuries sustained while working at construction sites. Read on to learn more about this topic.

An Overview of a Contractor's Obligations

Some contractors believe their obligation is to hire and pay workers. However, they must provide compensation to any of their workers injured while working. This is in addition to providing a safe working environment. For example, it is the duty of a construction contractor to warn his/her employees about the potential hazards associated with their work.

In general, worker's compensation varies from state to state and contractors must comply with the laid down insurance laws. In some states such as California, it is illegal for contractors to conduct business without workers compensation coverage. Contractors who break this law run the risk of facing criminal prosecution as well as a fine of up to $100,000. Furthermore, the likelihood of losing their contractor's license is quite high.

For contractors who do not have worker's compensation, the state of California pays hospital bills using money from the Uninsured Employers Fund and then recovers the funds through the same methods used to recover tax arrears and student loans.

General Liability Insurance

General liability insurance protects contractors and their businesses from liabilities arising from accidents suffered by their employees at work. At a minimum, the majority of general liability insurance policies cover the following five basic categories:

• Personal injury.
• Bodily injury.
• Independent contractor's liability insurance.
• Completed operations/products liability.
• Advertising injury.

Liability insurance also covers a contractor's legal fees if former or current employees file a suit in court. A contractor who does not have liability insurance will have to use personal finances to compensate employees who suffer injuries while working.

Benefits of Liability Insurance

For a contractor running a small or medium size business, finding the money to settle employee's hospital bills or pay lawyers might be challenging and can lead to bankruptcy. However, contractor's liability insurance provides financial security and ensures a business continues to operate. Remember most lawyers are willing to take on personal injury cases on a "no-win-no-fee" basis making it easy for workers to file lawsuits. It is also a legal obligation to have liability insurance. Most states do not allow contractors who do not have this type of insurance to operate.

If you are contractor who regularly hires temporary or permanent workers, it is advisable to have liability insurance coverage. This type of insurance covers liabilities that might arise from injuries caused by trench collapse, repetitive motion, falls, scaffold collapse, and lack of protective clothing and equipment. Your insurer pays medical rehabilitation costs as well as lost wages to injured and disabled employees.

About the author:

Jennifer Caughey is a freelance content writer who lives in Toronto, Canada. Jennifer has most recently been writing guest posts for KCY at Law.