Many large projects require contractors to carry certain forms of insurance policies as conditions of working together with project owners, making compliance an imperative in order to secure business opportunities.
Contractors can obtain these policies through either purchasing individual coverage individually, or bundling multiple policies into an affordable business owners policy. Below are six forms of coverage all contractors should consider for their respective businesses:
General Liability
General Liability Insurance, also known as Commercial General Liability (CGL) or Construction Liability, protects contractors’ businesses in the event that their work causes bodily injury or property damage to third parties. CGL/construction liability policies cover legal expenses, settlement awards or judgment awards as well as costs related to cleanup.
As part of their contract requirements, many clients require contractors to have general liability insurance as a condition for working together. This shows clients that contractors have prepared themselves financially in case any accidents should arise while on site, giving peace of mind to both themselves and clients alike. Overall, having such coverage gives contractors peace of mind while improving their professional image.
Examples of how a general liability policy can help to safeguard contractors include:
Premises Limitations: CGL policies typically only cover the physical location of a construction project, meaning if you work at one job site but then take on another in an unprotected locale, an additional policy may need to be purchased for that new one.
Personal and Advertising Injury Coverage: This coverage in your general liability policy protects against claims of libel, slander or copyright infringement that could arise from advertising and promotional activities that damage a competitor’s business reputation, such as any false statements made about them that result in their bad name being damaged by your statements or activities.
Completed Operations Liability: Even once a contract has been completed, contractors may still be held liable for issues that arise post-completion. For instance, if you repair plumbing at a customer’s home and it bursts again shortly thereafter, they could hold you liable for damages that resulted from their repairs – however with CGL coverage for completed operations aspect will offer protection in such circumstances.
General liability policies provide additional coverage against damage done by contractors at job sites to third-party equipment, which helps avoid you being held liable for replacing or repairing equipment that was damaged during client visits and can save a lot of money for businesses.
Business Owner’s Policy (BOP)
Though BOP insurance may not be mandatory for most contractors, it provides at least the minimum protection and can save your business from financial ruin. Coverage includes damages caused by operations or products of your business as well as lawsuits for personal/advertising injuries such as libel/slander. Furthermore, it covers costs related to property damage repairs while continuing business operations during repairs.
Small to mid-sized businesses such as copywriters or video editors typically qualify for business owner policies (BOP). You may also be able to purchase additional coverage with higher limits if necessary. Unfortunately, BOP policies typically do not include professional liability coverage for malpractice or errors in professional services rendered, or workers’ compensation insurance which protects employees for work-related injuries or illnesses sustained on the jobsite.
If your business experiences a catastrophic loss such as fire, the property portion of a BOP plan can help restore or replace essential equipment and furniture that have been destroyed, as well as cover any lost income and expenses such as rent and payroll. Furthermore, many plans include hired/non owned auto coverage which pays for vehicle use related to business operations in other people’s cars.
Insureon’s expert agents can tailor a BOP that includes other essential coverages, like directors and officers insurance or crime, while adding optional add-ons like contractors E&O insurance, inland marine coverage or workers comp.
Next is an online-only commercial insurance startup offering BOP policies directly. They make for an ideal option for shoppers who prefer an all-digital experience and don’t require highly specialized types like D&O cover. NerdWallet has reviewed Next to gain more insight into its features and customer experience. Other providers offering business owners policies are Insuance and AmTrust; Insuance’s website is user-friendly with an easy quote process; customers rate them highly for its comprehensive coverages, customization options and affordable premiums; while AmTrust boasts an expansive online database where policies can be searched by state and category.
Commercial Auto
Mechanical contractors spend much of their time traveling between client sites across a city, state or country. They use vehicles of various kinds to transport materials, tools and equipment between job sites. It is vital that mechanical contractors carry commercial auto insurance as this type of policy covers costs associated with accidents that happen while their vehicles are on the road as well as losses such as theft or vandalism incurred while using them for work-related travel purposes; additionally it often covers repairs caused by uninsured or underinsured drivers involved in an accident that results in vehicle damage incurred from collisions caused by drivers that lack adequate insurance policies coverage for damage to repair costs caused by drivers who lack adequate coverage if involved in an accident caused by someone with uninsured or underinsured drivers involved if involved in an incident caused by uninsured or underinsured driver involved causing damages to another vehicle involved as well as theft/vandalism costs for loss associated with an uninsured or underinsures liability from uninsured or underinsured drivers involved as well as any cost for damages sustained as result from uninsured or underinsured drivers involved resulting in any involved accidents caused due to uninsured or underinsured drivers either due to negligent acts caused by either uninsured/underinsured drivers that caused damages by an uninsured or underinsured driver being involved due to lack of coverage coverage for damages caused due to non-coverage coverage issues caused due to accidents caused due to uninsured driver caused damages due to underin coverage by their policies that results due resulting from repairs caused due to repair costs for repairs related damage caused caused drivers not having coverage coverage/underinsurance coverage caused from an unin or underin coverage being covered drivers (dued drivers or non-coverage coverage or due lack thereof being coverage or coverage being either side /or/underinsurance policies coverage provided drivers/d/insurance drivers caused either way caused.
Most importantly, commercial auto policies provide coverage for employees driving their personal cars or trucks while working for your business. These policies typically offer higher limits than standard personal auto policies and include rental or borrowed vehicle coverage as a valuable safeguard to protect your company against claims that could arise due to negligent employee driving practices.
Contractors that run medium-sized operations should consider adding extra coverages such as E&O, workers’ comp, property and general liability policies to their policy to safeguard themselves against catastrophic losses that might result from claims. They should also increase their excess liability limits as an extra layer of defense in case something unexpected comes up that threatens catastrophic loss.
Large contracting firms should add business interruption coverage to their policies. This type of coverage ensures they have funds available should a disaster interfere with normal operations, so they can maintain service to their customers and not lose business opportunities.
Working with an independent insurance agency that understands the unique insurance needs of contractors is key for their businesses. A knowledgeable agent can assist in finding a plan that will offer all necessary protection at competitive prices – contact Beach & O’Neill Insurance Associates now for your custom business insurance quote in New York! We proudly serve contractors from coast-to-coast.
Workers’ Compensation
Most states mandate that small businesses purchase workers’ compensation insurance for their employees. Unfortunately, many business owners overlook the fact that contractors, subcontractors, and hired personnel considered employees under workers’ comp laws may also sue your company should one become injured on the job and seek damages; as a result, some companies require contractors carry such coverage before agreeing to work together.
Workers’ compensation insurance provides coverage for medical expenses and lost wages related to work-related injuries or illnesses, disability benefits for an employee who can no longer work, as well as death benefits for loved ones of workers injured on the job.
Independent contractors are not legally required to purchase insurance policies for themselves or their work; however, many may opt to do so for various reasons. One such reason could be legal requirements in their field or because their contract stipulates it (for instance a homeowner may ask them for it as part of the project).
Purchase of this type of insurance can also protect contractors’ equipment. Contractors often rent or lease building supplies and machinery, so having this coverage in place could help recover any associated costs should it become damaged or stolen while in use on the jobsite.
Contractors often find it beneficial to purchase workers’ compensation and general liability together in one package policy, referred to as a wrap-up policy, which can save both time and money. Wrap-up policies are especially valuable for larger projects where one contract manager might oversee multiple subcontractors and hires.
Be mindful that some specialty insurance brokers offer contractors workers’ compensation policies as part of a business owners policy bundle, helping them save even more on premiums. When shopping for any type of coverage such as those above, speaking to a broker who specializes in this field is recommended – they can assist you in finding a policy tailored specifically for your needs.
