Contractor’s Insurance: A Guide to What Coverage You Need

Your business is unique, so your insurance should be, too. Your contractor’s insurance coverage needs can vary widely based on the specifics of your business, and it can be difficult to determine what types of coverage you need. Here’s a brief overview of the types of coverage your business needs.

The Necessities

Depending on your business and the scope of your projects, your contractor’s insurance coverage needs may extend just to the basics. In addition, many states, localities, and licensing boards have specific insurance requirements you need to work legally. Typically, you need some or all of these types of insurance:

• Contractor’s General Liability Insurance: If you cause any type of damage to a third party while at a job site, your insurance company will handle the claim
• Workers’ Compensation Insurance: If your employees are injured on the job, your insurance covers medical care, lost wages, and other expenses
• Projects and Completed Operations Insurance: This covers your work after you’re done — if the work is done improperly, your insurance will cover it
• Equipment Coverage: This insurance covers damage to tools you own
• Commercial Auto Coverage: This insurance covers any damage caused by your work vehicles
• Property Insurance: If you own real estate (such as a warehouse where you store equipment), this policy protects that real estate and any property on it

Keep in mind that even if you aren’t legally required to get these types of insurance, it’s usually a good idea. In particular, general liability insurance and workers’ compensation insurance (if you hire employees) are the two most important types of insurance to have.

Working without insurance is a gamble that seldom pays off. Mistakes are bound to happen, and if you face a lawsuit while uninsured, your company can go bankrupt.

Recommended Extra Coverage

Many property owners will require the following coverage for contractors working on their projects:

• Employment Practices Insurance: Covers lawsuits in the event of employer misconduct like harassment and discrimination
• Leased Equipment Insurance: Covers any equipment you lease if it is damaged or stolen
• $2–5 Million Liability Umbrella: This liability insurance goes beyond the usual liability insurance amount of $1 million
• Hired and Non-Owned Insurance: This auto insurance covers damage caused by any work vehicle you rent

If you want extra protection while on the job, you should purchase these types of additional insurance. They are also a great option if you are working on a large project.

Before beginning a contract, verify the types of insurance the property owner requires. An experienced professional can tell you whether your new or current insurance meets the requirements.

Get Contractor’s Insurance for the Right Price

At Hoffman Hanono Insurance, we’re committed to helping contractors find the right insurance policies. With us, you’ll get a policy that includes everything you need — and nothing you don’t.

We’ve been in the business since 1959, and we can work with you to design an insurance policy that fits your needs and budget. Contact us today to get started!