Contractors are responsible for safety during project operations. To ensure everyone is safe while working, they need insurance to protect them from possible accidents or damages. Contractor insurance can help you cover both personal injuries as well as property damage.
Hence, it becomes crucial for all business contractors to make an arrangement. There are various types of insurance available for contractors that you may be interested in, such as general liability, property and equipment insurance, Contractor pollution liability insurance, etc. Here are a few factors to consider before buying insurance.
What Is Contractor Insurance?
It is insurance offered to businesses and individuals who contract to perform work. This type of insurance may cover risks associated with performing work, such as property damage, personal injury, and death.
Things To Consider Before Buying the Insurance
Business owners should always consider insurance when engaging contractors to work on different projects. Contractor insurance popularity is on the rise. A report by the National Association of Home Builders found that in 2017, 73 percent of builders surveyed said they had increased their use of contractor insurance in the past year.
The increase can likely be attributed to several factors, including construction-related accidents and illnesses. In addition, it provides coverage for accidents, injuries, and property damage that may occur while a contractor is performing work on your behalf. However, before buying such insurance, you should keep a few things in mind, listed below.
Type of Coverage:
Knowing what types of coverage your business needs will help you make the most informed decision when selecting a policy.
Contractors may need three main types of coverage: general liability, protection of the property and equipment, and liability. General liability covers you if someone else is injured due to something you did on your job sites, such as striking a visitor. It may also include legal expenses if sued.
The insurance for property and equipment is meant for small tools to large-scale equipment brought to various sites. It may include protection of skid steer, excavator, backhoe, etc.
Most contractor policies require a broker to help determine the best coverage for your business. Brokers can also help you file claims when needed.
Consider the coverage for all types of work:
It is essential to ensure that your policy covers all types of work. This includes both direct and indirect exposure to potential risks. Additionally, you should ensure that the policy has appropriate limits on coverage and exclusions. Finally, consult an insurance specialist to get the best coverage for your construction project.
Consider the length of the policy:
Most contractor policies are for a precise period, such as one year or three years. Ensure you understand your coverage’s extended length and what happens if that time runs out.
Check the exclusions:
Many contractor policies exclude theft, accidental injury, and property damage. Make sure that the policy covers everything you need it to.
Be aware of deductible amounts:
Most contractor policies have a deductible amount, meaning you must pay part of the claim before the insurance company covers any costs. Therefore, know how much your policy will cover your claim before filing it.
Research and recommendation:
Get quotes from different insurers and compare them based on price and coverage levels. Ask for recommendations too from others to get the best for you.
Insurance for contractors is an essential part of any business’s risk management strategy. Companies can protect themselves from costly legal proceedings by providing coverage for losses resulting from contract disputes and ensuring they are paid promptly. This protection can also improve relationships with clients and suppliers and promote a positive business environment.