What Type of Insurance Do Contractors Need?
What Type of Insurance Do Contractors Need?
If you’re a contractor, then you are well aware of the inherent risks in your line of work. On a daily basis, you may be required to work at heights, use dangerous equipment, be exposed to toxic substances, and other challenges not faced by other industries. Given these potential risks, it’s important to make sure that you, your clients, and your employees are protected.
For many contractors, a single claim could be enough to put them out of business. So, for peace of mind and to safeguard the people around you, your company assets, and to prevent bankruptcy, invest in the right type of contractor insurance so you are protected in the event of a claim.
Insurance for Contractors
If you are a tradesperson or construction contractor, don’t let a claim derail your business. Consider the policies below to ensure that medical bills are covered, your equipment is safe, and your business is protected against liability.
Commercial General Liability
Commercial general liability is the most important type of coverage to have. It is often required for contractors to start a project and will cover you for third-party liability, including bodily injury and property damage.
You will be protected if, in the course of your business operations, your customer’s property is damaged or if they become injured. This can cover the cost to fix property damages, as well as help you financially recoup costs for medical bills or legal fees. Contractors have a higher risk than other industries which require commercial general liability insurance. Ensure you have coverage sufficient for your industry.
Tenants Legal Liability
If your client is a tenant, they may be held liable by their landlord for property damages resulting from your negligence. Therefore, they will often require you to carry tenants’ legal liability insurance. This coverage will kick in if you do something negligent to cause damage to surrounding units. It is especially relevant to multi-occupancy buildings like commercial spaces in a strip mall, high-rise office buildings, and more.
Products and Completed Operations Coverage
Claims can arise at any time during the course of your project. Products and Completed Operations coverage will protect you from lawsuits that allege your completed project or service has resulted in property damage or bodily injury. This can be triggered by a physical product you have manufactured or by a service, such as a home renovation you have performed.
Tools Floater and Contractor Equipment Insurance
Acquiring tools and equipment is a costly endeavour. Ensure you have the right coverage in the event they go missing or get stolen. A tools floater will cover the costs of hand tools and other equipment which are under $1,500-$2,500 in value.
If you are like most contractors, you can’t perform your work without these specialized items. Make sure your work doesn’t come to a standstill by protecting your tools and equipment.
Commercial Vehicle Insurance
If you own a car, truck, or other vehicle that is designated for commercial use, it is important to cover your vehicle against loss or damages. A personal auto insurance policy will not cover you for business operations, so make certain that your vehicles are insured under a separate auto policy.
Your coverage will depend on the use, range, and type of vehicles owned by your business. It can cover anything from accident benefits coverage to collision coverage and property damage liability coverage. An insurance broker will discuss your options with you to find a plan that meets your needs and budget.
For many contractors, a large portion of the project cost is dedicated to materials. However, these materials and supplies can sometimes be a target for theft. If you have to purchase them again, you may not be able to make a profit on the project. That’s why it’s best to have an installation floater which will cover the cost of supplies and materials located on the project site until they are installed.
Contractors Errors and Omissions
We all make mistakes. A Contractors Errors and Omissions policy will protect you against liability resulting from one of your professional decisions. This is particularly important to contractors who take on design and build projects. If there is a loss due to an error in the design flow, that’s where this coverage kicks in.
A contracting business can be lucrative, but only if you put the right safeguards in place for it to thrive. Satisfy client and bank expectations and set yourself up for success with contractors insurance from Jeffrey and Spence.
Our brokers will meet with you to discuss the various aspects of your contractor business, so we can understand what risks you’re facing and provide you with the right commercial insurance coverage for the job. You can’t predict the future, but you can protect yourself against the unexpected with contractors insurance from Jeffrey and Spence.