Contractors and Liability: What You Should Cover and Why You Should Cover It

Frequently, contractors need to provide a certificate of insurance to clients and state agencies. On the whole, construction is an industry in which all parties understand that insurance isn’t merely a good idea, it’s a necessity.

However, we can confidently say that many contractors are underinsured. Instead of simply meeting the baseline requirements, try getting coverage that really works for you.

What Kind of Insurance Do You Need?

If you’ve ever examined your business for areas of risk, you’ll have a leg up on knowing what your exact insurance needs are. For instance, we want to protect our materials and tools. Where these are housed can impact how much insurance we have. You should always have a policy that will help out should your essential materials be damaged or stolen where they’re stored.

If you share ideas or create original designs, there’s another reason you should ask an agent about insurance beyond general liability. If you’re passing out advice to homeowners, that might be a good reason to expand coverage.

Speaking of homeowners, is that your core client base? Or do you also get contracts from other businesses?

Where home operations are located and whether or not you employ anyone else also counts. If you have an office somewhere, as well as a crew, you’ll want your space and your workers covered.

There’s also the matter of getting contracts. Some contracts require you to have different types of insurance, making it a top reason why contractors seek out additional policies.

Building a Portfolio of Policies

The good news with companies offering contractors liability insurance is that they make it easy by bundling various kinds of coverage together. This allows you the convenience of combined payment, as well as a more attractive rate.

How this is packaged will vary from provider to provider, but here is what you need to make sure is covered.

Your tools, material, and office. Insure any offices, garages, yards, lots, or other areas where you keep the tools of the trade.

Your employees. If you’re hiring, you need worker’s compensation. No ifs, ands, or buts.

Your vehicles. The law requires every vehicle to be insured, so don’t try and cut corners by putting your ride to work at risk.

Your ability to earn. A good policy should have your back if you get ill or injured.

Your expertise. If you’re advising clients on the technical aspects of their project and informing the design, you want to be careful. This is an unexpected spot where you could be sued.

Your projects. Weather events, fires, and criminal acts can destroy your works in progress.

Your reputation. Of course you only provide the best work. Still, many states require that you offer a warranty on any work you’ve done. In addition to that, professional liability coverage is necessary to shield you from claims.

Contractors know that their job is significantly more high-risk than a lot of other industries. That’s why all well-respected businesses make ample insurance a priority. Command higher pay – and keep it – with insurance that has you covered every step of the way.