Contractor insurance is the best method to cover a wide variety of hazards without buying a cookie-cutter policy that may not offer enough protection. Various options are available depending on the type of contracting work your business does. From general contractors to HVAC technicians, plumbers, carpenters, electricians, painters, and the like, contractor insurance may help provide your business with coverage and peace of mind.
Here are seven coverage options, noting risk factors and solutions, to consider in your contractor policy:
- Risk Factor: A major loss to your business and its contents is possible in the event of a fire, robbery, or natural disaster.
Solution: Obtain commercial property insurance to safeguard the tools, supplies, and furnishings your company owns or leases. Commercial property insurance can be obtained on its own or in conjunction with other policies to safeguard a company’s physical assets, regardless of whether the company owns or leases the building or workspace in question.
- Risk Factor: A contractor’s business vehicles, whether they are owned or rented, can present a number of risks. If your contractor firm uses a fleet of cars, trucks, vans, or other vehicles on a typical workday, a single accident might significantly impact your bottom line.
Solution: Vehicles owned or leased by contractors can be protected by purchasing business auto insurance, which often includes liability protection as well as optional comprehensive and collision protection.
- Risk Factor: As a contractor working on a building site with other contractors and vendors, you run the risk of being held financially responsible for any accidents or damages caused by the other contractors or vendors. If another business, supplier, or subcontractor causes injury or damage to your shared client, you need insurance to cover the costs.
Solution: Negotiate a hold harmless provision into your contracts with all relevant parties. If the other party is negligent and causes you injury, a hold harmless agreement will protect you from financial losses. The entity must name you as an additional insured on their policy, which should be a requirement of the contract.
- Risk Factor: If you don’t have access to your tools and equipment, any progress on the job site can grind to a standstill.
Solution: The answer is contractors’ equipment insurance, a policy tailored to the unique needs of tradespeople when they are on the go. Equipment losses due to fire, explosion, vandalism, theft, collision with other equipment or items, and overturning are all covered by the policy.
- Risk Factor: Due to the incomplete nature of a building in the construction phase, insurance policies covering either commercial or residential structures do not apply. Theft of building materials and expensive equipment like generators and compressors are only two examples of the loss risks you face as a contractor.
Solution: Builder’s risk and installation insurance protects home and business
owners from the time a structure has broken ground until it is fully operational.
- Risk Factor: The law mandates that you have enough coverage in place if one of your employees sustains an injury or illness on the job.
Solution: If an employee is hurt or becomes ill because of their work, they will be covered by workers’ compensation.
- Risk Factor: As a contractor, your business may be susceptible to many risks, such as claims due to bodily injury, property damage, personal injury, and more. And if you hire other contractors to perform work on your behalf, you can be held responsible for any damage they cause on the job.
Solution: Commercial general liability insurance is an absolute necessity for every contractor. This type of protection provides broad coverage for premises, operations, products, and claims to third parties or property when you are deemed responsible and liable. It will also pay to defend any covered lawsuit or action regardless of its merit.
If you need contractor insurance to protect your contracting business, contact us to go over your company’s needs and coverage options.