Working as a contractor, whether electrical, plumbing, or construction, can be incredibly high-risk. The job involves many employees and machinery to complete the job on time, requiring employers to keep an eye on many moving parts at the same time. As such, when the necessary precautions are not adhered to, whether by the employee or the company, it can be a breeding ground for injuries or damage of property and litigation. Having the right type of insurance for contractors can help mitigate potential risks such as lawsuits and hospital expenses.
We are now going to look at some of the different types of contractor insurance to help you identify which one works best for you.
1. General Liability Insurance
It’s imperative that independent contractors secure a general liability insurance policy, as it protects you against potential costs such as injury and medical expenses. Moreover, it shields you as a contractor from damage that you might have caused to a client’s property or as a result of faulty construction materials.
It’s important to note that general liability insurance does not protect against losses that result from professional negligence, which is why it’s good to couple general liability insurance with professional liability insurance.
2. Professional Liability Insurance
Every human being is prone to making mistakes no matter how good they are at what they do. With professional liability insurance, costs that result in erroneous designs or construction that can affect the completion of a project are covered.
While the policy only covers the damages that result in financial losses and not the cost of redoing the project, claims of negligence from an internal source or from a third party are insured, which relieves a lot of the strain from those stressful situations.
3. Commercial Auto Insurance
Even if you don’t have a fleet of vehicles that come in handy for your business, it’s important to insure the ones that you own. Using your vehicle to run company errands is not the best option. It’s best to have a car under the company name which you can insure under the commercial auto policy. Either way, any car used for your contracted jobs needs to be insured outside of your regular auto insurance policy.
Truck and cargo insurance covers all types of vehicles including trucks and small vehicles, trailers, and dump trucks. If the vehicle is used on the road in the county where it was registered, then it’s recommended to have a commercial auto insurance policy.
4. Worker’s Compensation Insurance
Contracting jobs often involve a lot of bodily risks, which inevitably leads to accidents happening on-premises. When one of your workers is caught in the middle of it, being completely financially responsible is the last thing you want.
If an accident involves an employee, worker’s compensation insurance policies cover the treatment your employee needs to get back up on their feet. These policies also cover the wages that are lost while the employee is taking medical leave, making it easier for them to recover with the knowledge that they will still be financially taken care of.
5. Inland Marine Insurance
If you’re in the construction industry, then you know that your work involves transporting goods from one place to another. Therefore, it’s recommended to have inland marine insurance in place. For contractors, it’s indispensable coverage.
In simple terms, inland marine insurance covers products, materials, and equipment when transported over land (commonly by truck) or while stored temporarily at a job site or warehouse. With Inland Marine coverage, you can avoid damages sustained in the event of accidents, theft, vandalism, or total loss. Our Inland Marine policy insures that when your business is on the move, we’ll protect certain items, such as:
- Transported Property
- Computer Equipment and Data
- Contractor’s Tools
- Artwork
- Buildings Under Construction
These insurance policies do not instantly cover damages caused by natural disasters like earthquakes, floods, or hurricanes. These additional protections can be added on, but it’s important to note that the policy does not already come with those protections in place.
6. Business Owner’s Policy (BOP)
BOPs are a comprehensive insurance policy that’s mostly catered to small and mid-sized businesses and are fairly customizable. Depending on the policy, it will cover property, business interruption, and commercial general liability insurance.
BOPs will also cover completed projects and those projects that are still under construction regardless of whether the property is rented or owned.
How Much Does Contractor Insurance Cost?
Contactor insurance varies on a case-by-case basis based on what you want to be covered. One of the determinants is the specific trade you need to be covered. For example, how much a plumber pays will differ from say a carpenter.
Other variables that affect the cost of the contractor insurance policy are:
- Location
- Type and number of vehicles operated
- Claims history
- General coverage needs
- Number of employees
Bethany Insurance Will Build the Right Foundation for your Protection
For all artisan contractors and their unique needs, Bethany Insurance agents are here to answer all of your questions and to help you find the policy your business needs. Contact us today to request a quote, or to go over the different options that are available for your business.