As a contractor, you face many risks and exposures. The inherent dangers of construction worksites present significant perils, and the pressure to meet deadlines and work quickly may exacerbate risk levels. Even a slight accident or error could cause devastating financial losses under these conditions. With that in mind, your business must prioritize robust loss control measures, including a versatile insurance portfolio.
What Does Contractors Insurance Cover?
In many cases, insurance companies may not offer a product specifically referred to as contractors insurance. Instead, your business may need to work with an insurer to compile a suitable contractors insurance portfolio consisting of several coverages. Although your specific needs may vary, the following are generally advisable inclusions:
- General liability insurance—This can provide financial assistance if you are at fault for an incident affecting a third party, such as bodily injuries, property damage or personal and advertising injuries (e.g., slander, libel, copyright infringement, false advertising).
- Errors and omissions insurance—This coverage, also known as professional liability insurance, can help pay your legal costs and losses if a client accuses your firm of providing services that were negligent, late, incomplete or otherwise inadequate.
- Commercial property insurance—This coverage can provide financial protection for physical property used to operate your company, including buildings, equipment, tools, electronics and inventory.
- Commercial auto insurance—This coverage can help pay for repair or replacement costs, or cover third-party losses for which you were responsible if your business’s motor vehicles are damaged or involved in an accident.
- Workers’ compensation insurance—This coverage, which is typically required by law, can provide financial assistance if your employees are injured on the job or develop a work-related illness.
- Builder’s risk insurance—This component of your insurance portfolio can help pay for losses involving structures currently under construction, including those being built from the ground up or under renovation.
- Inland marine insurance—This coverage provides financial protection for equipment and materials being transported or stored off-site.
- Commercial umbrella insurance—This form of secondary insurance can provide additional financial aid and limit your out-of-pocket losses if the policy limits of your other forms of liability insurance are exhausted.
Your business should work with a qualified insurance professional to identify any additional coverage needs. You may also be required to purchase surety bonds to qualify for certain projects.
How Can Contractors Reduce Insurance Costs While Maintaining Adequate Coverage?
While purchasing and maintaining a robust insurance portfolio is essential for your business’s stability and security, it may also be possible to limit your insurance costs and lower your premiums while maintaining adequate coverage by taking the following steps:
- Prioritize safety. On-the-job injuries and other incidents can increase your premiums upon renewal.
- Bundle coverages. It may be possible to achieve lower rates by purchasing more than one policy from the same insurer.
- Reassess regularly. Your insurance needs may change over time. Take time to work with your agent to ensure you are still getting an optimal price on your coverage.
- Check subcontractors. If you hire subcontractors for a job, you should ensure they are sufficiently insured with their own coverage to help avoid reliance on your policy.
- Increase deductibles. Although increasing your deductibles may mean paying more out of pocket, you may still retain sufficient coverage limits while lowering your premiums.
We’re Here to Help
The construction industry is consistently ranked as one of the most dangerous among U.S. employers. Costly accidents and errors may occur regardless of how experienced and diligent your company may be. As such, a suitable contractors insurance portfolio is necessary to help secure your business’s finances and future.
At S&G Mitchell Insurance Agency, we will draw on our extensive knowledge and experience to assess and address your coverage needs. Contact us today to get started.