What are the legal requirements for insurance in the construction industry?
In California, the legal requirements for insurance in the construction industry depend on the type of construction being done and the size of the project. All construction contracts must include a written notice to the contractor that they must provide proof of insurance coverage. This proof may be in the form of a certificates of insurance, or an endorsement from the contractor’s insurance policy. Contractors must also provide a copy of their liability insurance policy or a certificate of insurance detailing their coverage. For larger projects, contractors must provide a bond or a performance bond. This bond is a guarantee that the construction project will be completed and that the contractor will be held financially responsible if the project is not completed. The bond must cover the cost of any damages caused by the contractor, their subcontractors, or anyone else working on the project. If the contractor is working on a residential construction project, they must also provide workers’ compensation insurance coverage. This covers medical expenses and wages for any worker who is injured on the job. Finally, contractors must purchase liability insurance. This is to protect against any claims or lawsuits arising from accidents or damage to property caused by the contractor’s negligence. Generally, the minimum amount of coverage required is $500,000.
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