As contractors continue to be in demand, you must spend time evaluating how to use your resources to maximize the benefits to your business. With that in mind, many contractors regularly review their contractors’ insurance to determine if the coverage still matches their needs and the current level of their business.
With that in mind, you might be wondering what auto insurance and liability insurance cover and if you need them both. This guide will answer those questions.
Auto Insurance – What is it?
Auto insurance is protection for your vehicle. If you get into an accident, that insurance will cover the damages to your car. Depending on the state, your company could be responsible for repairs and medical bills, regardless of who is at fault. Other states will require the at-fault driver to cover those costs.
Most auto insurance plans provide coverage in property, liability, and medical. Policies are often issued in six-month or year increments. You can work with your insurance agent to get the right policy for your business that also fits your budget. Still, it is essential to know the exceptions under your policy, drive the vehicles, and be covered under insurance.
Many of these policies will cover the medical costs of someone injured in an accident, but some policies will also cover the costs associated with replacing a stolen vehicle. Each policy can offer specific coverage, depending on your needs and the laws of your state.
Liability Insurance – What is it?
Liability insurance covers the insured party against claims that result from injuries or damage to people and property. These will also cover legal expenses and payouts if you are found to be liable legally. This type of insurance is likely a required part of your auto insurance, along with personal liability, workers’ compensation, and commercial liability insurance.
Liability insurance can also help cover you if an employee is injured on the job or claims resulting from your company’s work on a home or business. The goal is to provide a means of protecting your business while still addressing potential legal claims.
There are multiple types of liability insurance, each with different exceptions and exclusions, so you must understand what is covered under your policy and what is not. For instance, most liability insurance does not protect against errors and omissions claims that arise from negligent professional services or a failure to perform your professional duties.
Do You Need Both?
It is important to note that you will likely need to have both in place as a contractor. Your auto insurance policy will include some liability insurance, but it will not cover other aspects of your business. A blanket liability policy under your contractors’ insurance will provide more comprehensive coverage.
However, to determine if you have the right coverage to fit your needs, it is essential to talk with your agent about your state requirements and then discuss additional coverage based on your current workload.
Contact us today to review your current contractors’ insurance policies to determine if it is enough coverage or if additional policies might be necessary.
Top Contractors Insurance Services is a full-service contractor insurance agency handling workers’ compensation, general liability, construction bonds, and auto quotes.