What types of insurance should a contractor have? This guest post from Rachel Porter at Custom Contractors Insurance provides an overview of how to protect your business.
Owning a contracting business carries inherent risks. There are many possibilities for people to suffer injuries or for properties to sustain damage. Whatever physical injury or property damage takes place on the jobsite, you can be sure it’s the contractor who will be on the receiving end of a claim—and may be forced to pay for it out of pocket.
However, contractors don’t need to risk losing money or closing shop because of a claim. As long as they have proper insurance coverage, they should be able to settle claims and continue business as usual.
Here are some types of insurance a contractor should have or consider getting:
1. Commercial General Liability Insurance
Commercial general liability is one of the most common types of insurance for contractors. It offers coverage against claims made by third parties for physical injury or property damage that happened during contracting work. Aside from paying the compensation amount, commercial general liability insurance also covers the legal expenses incurred during litigation.
2. Workers Compensation
As its name suggests, workers compensation makes sure employees are covered in case of on-the-job accidents. Medical treatment, disability income, and rehabilitation costs, as well as compensation to families for work-related deaths are typically covered by this kind of policy. Workers compensation is necessary for the protection of employers from suits that injured employees or families of deceased staff may file in court.
3. Contractors Pollution Insurance
There are strict environmental laws in place that all builders are expected to follow to the letter. Considering the ever-present risk of pollution whenever a builder operates, contractors always face the risk of getting sued by third parties for violating those environmental laws. Contractors pollution insurance can protect builders and other types of contractors from such claims, which could prove to be detrimental to their business.
4. Automobile Liability Insurance
Contractors transport material, equipment, and workers to a construction site using a variety of vehicles and heavy trucks. In case these vehicles cause property damage, bodily injury, or death at the construction site, whoever owns those vehicles is liable to compensate third parties who file a claim. Automobile liability insurance provides coverage for any third-party claims in case of injury, damage, or loss, and it will also cover all legal costs incurred while the claims are being deliberated in court.
5. Builders Risk Insurance
A construction project involves lots of materials and equipment that could get lost, stolen, or damaged. Builders risk insurance helps protect builders and contractors from those losses. This type of insurance is also beneficial for subcontractors and equipment owners involved in the project. It’s typically provided along with contractor’s general liability insurance.
6. Roofers Insurance
Roofers insurance is a kind of general liability insurance that provides coverage for roofing contractors whose workers get involved in a workplace accident that leads to physical injury or property damage. Considering that roofers work at a certain height, the risk of accidents is so much higher, whether it’s a worker taking a misstep or a tool falling from the roof.
These are just some of the types of insurance a contracting business should have or consider to protect themselves and their business. While some contractors might be concerned about paying premiums, they only have to think about the real possibility that they could be forced to close if they have to pay for claims out of their own pockets.
Don’t wait until an accident happens—and stop wondering what types of insurance should a contractor have. Always talk to an insurance professional with experience insuring contracting businesses to make sure you’re adequately covered and that you’re compliant with your state’s insurance requirements for contractors.
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