General Liability Insurance in Arizona
General liability insurance provides coverage for the Named Insured (your business entity) for Bodily Injury and Property Damage (not your employee) and caused by you (or your employee’s negligence). This coverage is at your premises, your work place, or even after you have completed your work and months later someone claims to have suffered a bodily injury or some property damage due to you not doing your job correctly.
The limits of liability available are $300,000 per occurrence $600,000 aggregate OR $500,000 per occurrence $1,000,000 aggregate OR $1,000,000 per occurrence $2,000,000 aggregate. The Aggregate limit is the most the company will pay in a 12 month policy term and is usually twice the occurrence limit. Other limits that are provided (at no additional charge) are $50,000 for Fire legal liability, $5,000 for Medical payments, and $1,000,000 for advertising and personal injury.
The Rating Basis
Your general liability insurance premium will be calculated based on how many people you have out in the field doing the work that could negligently cause a bodily injury or property damage. Some companies use the number of full time and part time people and other companies use payroll to determine your premium. They will also charge (though at a much lower rate) for your cost of sub-contractors.
If you have certificates of insurance on those subs, they will charge the sub-contractor rate. If you do not have a certificate from the sub-contractor – they will charge like he is your employee (which is a much higher rate). These policies are AUDITABLE.
Umbrella Express Policy
This is an optional policy that many businesses take out for an additional layer of coverage over the underlying general liability insurance, business auto, work comp employers liability and any other liability policy they have. A true umbrella policy not only adds a million dollar limit over underlying policies, it drops down to cover something excluded on GL policy usually over a self insured retention i.e. deductible ($10,000).
It will respond first dollar on losses not covered under any underlying policy. It is usually less expensive if you needed a $2,000,000 limit, to have a $1,000,000 umbrella over a $1,000,000 underlying policy than to have $2,000,000 general liability, $2,000,000 business auto and $2,000,000 work comp. An excess policy is like the umbrella except that it follows the underlying GL policy. There is no “drop down” feature.
Who Needs General Liability Insurance in Arizona
Most Arizona contractors need general liability insurance at some point, even if the Registrar of Contractors doesn’t require it for licensing. General contractors, property managers, HOAs, homeowners and commercial clients routinely ask for proof of coverage before letting a contractor on a job site, often through a certificate of insurance with additional-insured wording added for the project.
Common scenarios where Arizona contractors are asked for general liability insurance include:
- Bidding on a residential or commercial remodel that requires a certificate of insurance before work starts
- Working under a general contractor who requires subs to carry their own coverage
- Pulling a permit or signing a contract with a property manager or HOA
- Protecting your business from claims tied to job-site conditions, including Arizona summer heat, monsoon storms and dust that can affect work and equipment
Arizona Requirements and General Liability Insurance
The Arizona Registrar of Contractors requires licensed contractors to post a contractor license bond (or cash deposit), with the amount depending on license classification and annual volume. Arizona also requires most employers with one or more employees, including part-time, to carry workers’ compensation; sole proprietors with no employees generally are not required to carry it.
General liability insurance itself is not mandated by the ROC for licensing, but it’s frequently required by contract, and carrying it helps protect your business from the bodily injury and property damage claims described above. For current licensing and bonding rules, contractors can also check with the
Arizona Department of Insurance and Financial Institutions, which oversees insurance matters in the state.
Why Get General Liability Insurance Through CIA
Contractors Insurance Agency (CIA) is an Arizona agency focused on contractors, and we’re the insurance partner of the Arizona Contractor License Center (AZCLC), the contractor licensing school. We understand how general liability insurance fits alongside your license bond, workers’ compensation and other coverage, because we work with contractors every day.
Our team provides same-day certificates of insurance, a callback within 1 hour during business hours, and a quote within 24 hours. Spanish-speaking agents are available, and we have offices in Phoenix, Mesa, Peoria and Tucson so you can get help close to your job sites. Our Phoenix location holds a 4.9-star rating from 111 Google reviews.
Ready to talk about general liability insurance for your business?
Request a quote or call us at
877-404-0707.
