Why cheap liability insurance can be lethal to you

As a result of the current economic downturn, all contractors are looking for ways to trim expenses. Every day I get calls from contractors looking for the "cheapest" insurance they can find.  This is based on their belief that all liability insurance policies are the same. They are dead wrong and the decision to go cheap can be very costly.

No insurance policy covers everything. All policies contain exclusions. (things that are not covered) If you are a plumber, would you want a policy that has no coverage for water damage? If you are a painter, would you want a policy that has no coverage for overspray? If you are a general, would you want a policy that has almost no construction defect coverage? Would you want a policy that pays the lawyers from the same pot of money they use to pay your claims? What if the lawyers use up all the funds? Who pays then?  YOU!

Insurance companies can offer a "cheaper" product simply by eliminating coverage for the most common sources of claims. If a claim comes in and it is not covered, who pays?  If the claim is denied or is frivolous, can you afford to hire an attorney to defend your good name?

The old saying that you get what you pay for is very true when it comes to liability insurance. If you want a "cheap" policy, that is exactly what you'll get.