What is Contractors Insurance?

Contractors Insurance is something every contractor in the U.S. needs to consider buying. In fact, you will find it quite difficult to get work without some form of insurance coverage, including general liability and/or professional liability.

This applies to any company involved in construction work, building, general contracting and even independent contractors in fields from information technology to consulting.

Contractors insurance is a necessity for nearly every contractor. As a contractor, a lot of responsibility falls on your shoulders from making sure that all your paperwork is accurate, that the project is being worked on, and the client’s requests are being met.

One more thing on the list is getting the proper insurance coverage you need to protect yourself and your clients. If you live in the US then you know that anything from failed projects, damages to property and employee injuries will be on you. That’s why you need to protect yourself from these incidents at all costs.

The way you protect yourself from liability is to start by shopping for affordable contractors insurance. As a contractor, anything can happen on the job. Somebody’s property may be stolen, an employee can get hurt, or an accident involving passers-by or pedestrians could happen. You never know what you may be liable for so it’s important that you cover all your bases.

What to consider when buying contractors insurance?

There are many things to consider when buying contractors insurance including what types if coverage you may need to buy. As a contractor, you have to protect your property, your equipment, insure against failed projects, and also make sure you’re not liable for damages.

The best policy to start shopping for first is general liability insurance. GLI covers you for property damage and injuries, and also covers your lawyer and defence fees should you get sued. A good GLI policy will have no deductible and will have a limit high enough to cover the specific liabilities associated with your business. This could be a $1 Million policy, $2 Million policy or higher. You can also supplement your maximums with another policy called an umbrella policy.

Confused yet? Don’t worry. A good insurance broker can assess exactly how much coverage you need and can help you find the right policy or policies for one low price. You can also shop online as many insurers are now offering contractors insurance quotes directly at their websites, effectively cutting out the middle-man. This passes on the savings to you, the consumer.

Of course, GLI is not the only commercial insurance coverage you may need for your particular business or enterprise. You should also consider professional indemnity insurance or professional liability insurance. This is an essential type of policy for many contractors to have in place.

Without this type of policy in place, if you make a mistake on your services, you can be held liable for the damages. In many cases, it will not even be your fault. And remember, if you are a contractor with employees, any mistakes made by your workers will likely be your responsibility as well. So if the worst-case scenario happens, you will need to be insured as the client will be able to sue you or your company for a lot of your money.

Oh, and speaking of employees, that brings up another insurance issue. If you hire employees, some states now also require you to buy workers compensation insurance. This covers workers who are hurt on the job. If it is law in your area, then be sure to get it.

“If you’re gonna play the game, boy You gotta learn to play it right”

Kenny Rogers

As you can plainly see, there are many different types of insurance policies that contractors need to carefully consider, and in most cases, a combination of multiple policies will be needed to protect yourself and your business. While many contractors think that some insurance plans are just a luxury they can do without, they don’t stop and think how that one lawsuit can ruin their finances completely, and even close down their once-thriving business forever.

If you are looking into buying a contractors insurance policy, take a close look at your business first and see what you need to be protected from. Look at state and local business insurance requirements and talk to other contractors to get some advice. Do some shopping online and get multiple quotes from some of the higher-rated insurers. Premiums can differ widely from one carrier to the next. The same type of contractor in the same state can literally be paying thousands of dollars a year more than their competitor, simply by ”settling” with what they think are fair enough rates.

It is also a good idea to talk to a qualified professional such as a commercial insurance agent or better yet, a business insurance broker. A broker will cost you a little more but they will be licensed in your state and required to work in your best interest, making sure you get all the coverage you need. That can be priceless when something goes wrong with a job.

When buying contractors insurance be sure to have any aspect of the coverage explained to you in detail. Any policy you buy will have exclusions and dollar limits that you need to be fully aware of. Don’t be afraid to ask questions before you buy, this will allow you to make the best decision for your business. And remember, insurance is not cheap, but it is necessary for most businesses, especially in the litigious society we live in. When it comes to business insurance, you can pay a little now, or pay a lot later

The information on this site is a general summary. Please refer to the actual policy for exact terms and condition

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Contractors Insurance, pay less.

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