As you build your contracting business, you need different levels of contractors insurance protection to meet the requirements of doing business. Each aspect of contractors insurance is focused on different parts of your business, from vehicles to a contractor’s bond related to the completion of a building or major rehabilitation project.
One of the most important insurance types that you need is liability insurance. What is contractor liability insurance and why is it important to your contracting business?
What is Contractor Liability Insurance?
There are two types of liability insurance related to contractors. The first is professional liability insurance. This insurance is meant to provide coverage to contractors and building professionals for construction errors. A contractor purchases this professional liability insurance to cover any mistakes made by either the contractor or the third-party vendors hired by the contractor to work on the job, such as architects, plumbers, and other professional vendors.
The truth is that even with the best blueprints and construction plan in place, there are a lot of people involved in the designing and constructing of a building. With that reality, mistakes can happen, and this insurance provides protection for your business. It can also cover other losses related to the project, but that depends on the specific policy.
There is also general liability insurance that protects against other forms of liability, including property damage and bodily injury. It also can help to protect your company against claims of damages on your customer’s property caused by your team. Vehicle coverage provides protection for the trucks that are a critical part of your business, especially if someone hits your vehicle and is uninsured because your insurance will make sure that your vehicle is repaired.
Depending on the amount of your construction projects in your work in progress list, you may need to increase your liability insurance. Taking time to review your coverage as your business grows is key to protecting your organization at any size.
How Can Your Business Benefit?
As you grow your contracting business, you may naturally want to move certain aspects of the business in house instead of continuing to hire third-party vendors to provide these services. Doing so might mean that you need to determine if that impacts how much liability insurance that you need to carry. Keep in mind, contractor’s liability insurance may not be available for brand-new projects, where builders risk coverage is more likely to be used instead.
Another benefit is if a third-party claim of injury is filed against your company, your contractor’s insurance will be in place to address it. Clearly, it is important to have all the right contractor’s insurance policies to meet the needs of your contracting business, either commercial or residential.
Having the right level of contractor’s insurance will also allow you to bid for larger projects that can accelerate the growth of your business. As you look to renew your contractor’s insurance certificate, that is the time to review what your policy covers and what it does not. Our team can provide full-service coverage of all your contractor’s insurance needs.
Top Contractors Insurance Services is a full-service contractor insurance agency handling workers compensation, general liability, construction bonds, and auto quotes.