Did you know that the value of insurance can erode with inflation?
Inflation can significantly impact the cost of insurance claims, especially in industries like construction, where the cost of medical expenses, construction materials, and legal fees can rise. This means the amount you’re covered for won’t always increase with the standard cost of living, and you might be underinsured.
Even if you understand the importance of having the right insurance coverage to protect your business and your livelihood, you need to consider this. Keep reading about how inflation impacts contractors’ insurance and what you can do to ensure you have the coverage you need.
Contractor Liability Insurance
Contractor liability insurance is a type of insurance. It covers any third-party damages or injuries that may occur on your job site.
Inflation can have a significant impact on the cost of these claims. If you have a liability insurance policy with a limit of $1 million from a few years ago, it might not be enough anymore.
Inflation means your insurance policy might not cover these expenses’ full cost, leaving you with more to pay. This is why it’s important to review your contractor liability insurance often. Ensure you have enough coverage to protect your business in the event of a claim.
Independent Contractors
If you’re an independent contractor, you might not have the same protection as an employee of a company with benefits. This is simply because many employers and companies do not offer insurance coverage for independent contractors.
It’s important to consider purchasing independent contractor liability insurance for yourself to protect you from financial losses in the event of a claim.
Just like with regular contractor liability insurance, the value of your independent contractor liability insurance can also be impacted by inflation. To ensure you have adequate coverage, it’s important to review your policy and consider increasing your coverage limit to reflect the rising cost of your expenses, materials, and fees.
Tips and Tricks
There are a few things that you can do when reviewing the policy to ensure that you have the right protection. The first thing is to evaluate your risk exposure. You should know your risks so that you can determine what coverage you need and what limits should be in place.
Next, compare other policies and coverages so that you can find an option that fits your budget. The cost of claims can change, which is why working with a professional can help you stay on top of the insurance market.
Choose the Right Contractors Insurance Today
Inflation can greatly impact contractors’ insurance, so it’s important to be aware of this when choosing the right coverage for your business. Regularly reviewing your coverage and ensuring you have enough protection will help you avoid being underinsured.
If you want to ensure that you are able to protect your business and your livelihood in the event of a claim, reach out today for a quote.
Top Contractors Insurance Services is a full-service contractor insurance agency handling workers’ compensation, general liability, construction bonds, and auto quotes.