Insuring Your Bottom Line: Why Contractors Insurance is Necessary to Your Business

StrategyDriven Risk Management ArticleContracting occupations, like electrician, insulation worker, mason, plumber, roofer, carpenter, and painter, all have unique features, including risks. Clients and employees can get hurt and a contractor could be held liable and be left with costly medical bills. Where general liability insurance prove invaluable in addressing some of the common risks contractors may confront, contractor insurance can offer contracting business owners protections where expensive setbacks that deal with operations/product, errors, contract dispute could greatly affect their business. Let’s look at why contractors insurance is paramount to your business and complete liability protection.

General Liability Protection

This is the basis of all contractor insurance policies and covers two main types of protection:

  • Bodily injury: Provides for medical care for a contractor or someone injured by a contractor’s employee on the job, and also includes coverage for legal defense if a contractor is sued for damages.
  • Property damage: Provides coverage for damage caused to a property by a contractor or an employee, even damage to a third-party property.

Completed Operations/Product Coverage

Completed projects can have issues or cause damage and contractors insurance provides coverage for any products a contractor sell or distribute, and helps with the expenses for claims related to completed services, for example, poorly installed wall shelving that results in injury to the property owner.

Commercial Auto Coverage that Fits Your Business

If your contracting business requires the use of commercial vehicles for a part of its operation, then adding commercial auto coverage to your contractor insurance is a great way to protect your business against unforeseen accidents that may be related to road conditions, weather, or collision with other motorists. Coverage may include collision damage costs, medical expenses, and damage from a specific natural disaster.

Errors and Omissions Coverage

Taking a job with the intention to do impeccable work doesn’t always lead to that result. It is possible for errors to occur, like an electrical job error that result in a fire. With a contractor’s insurance that covers errors and omissions, you can protect you and your business from claims of negligent acts, errors or omissions during a project that causes a monetary loss for the client. This coverage may extend to business owner, employees, and subcontractors of the business.

Contract Liability Coverage

This coverage comes in handy in a contract dispute and is essential, especially if you regularly hire independent contractors who possess limited or no insurance coverage.

Workers’ Compensation Protection Coverage

Having workers’ compensation protection should be a smart addition to a contractor’s insurance. Employees are key players in your contracting business and worker’s compensation protection is beneficial if an employee gets injured on the job by helping to cover medical treatment, and may even provide a portion of lost wages if time off from work is required because of the injury.

Contractors insurance is necessary to protect your business, assets, and employees. General liability protection may not be enough to provide the peace of mind that you will need to continue daily operations when costly claims hit your business. Contractors should think about the types of protections that are beneficial to their business and acquire a policy accordingly.