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Contractors Insurance 101

 

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What kind of insurance does a contractor need?

As a contractor, insurance is essential to protect your business from the various risks associated with your line of work. In the state of California, there are several types of insurance policies that are considered a must-have for contractors.

Commercial General Liability Insurance

To start, Commercial General Liability Insurance is one of the most popular types of insurance for businesses. This policy provides coverage against claims for physical injury of third parties, property damage that occurred during work, and legal expenses. Many insurers and MGAs provide general liability programs specifically designed for contractors. These programs take into consideration the nature of the work and provide coverage based on the insured’s needs.

Workers Compensation

Another critical policy for contractors is workers’ compensation insurance. This insurance policy provides coverage to employees who incur on-the-job accidents and is required by state law. A good workers’ compensation policy will provide coverage for medical treatments, rehabilitation costs, disability income, and family compensation for work-related deaths. Additionally, the construction industry presents a significant amount of risks to its employees, which will greatly affect the premiums placed on the policy.

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Commercial Auto Liability Insurance

In addition to the above policies, contractors should also consider Commercial Auto Liability Insurance. This policy provides coverage for any claims due to damage, injury, or loss. Any vehicle that is used to transport equipment or workers should be insured in order to provide coverage for physical injuries, property damage, or death. Personal auto insurance policies will not suffice.

Professional Liability Insurance

Furthermore, Professional Liability Insurance is essential for contractors and developers who work with builds. This insurance policy protects your business from claims based on design flaws, customer dissatisfaction, and execution flaws

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Builders Risk Insurance/Equipment Coverage

Additionally, Builders Risk Insurance/Equipment Coverage is crucial for insuring not just employees but also equipment and materials. A builders’ risk insurance policy protects contractors and artisans from potential theft, damages, or losses of their building materials and equipment. It is usually included in a contractors’ general liability policy or business owners’ policy.

Roofers Insurance

Lastly, roofers may require a separate roofing insurance policy to protect the business from any accidents that occur while working on a roof. This type of insurance is usually not included in general liability insurance programs targeted to small business contractors and developers.

In conclusion, as a contractor, it is essential to have a comprehensive insurance plan that covers the various risks associated with your line of work. This includes commercial general liability, workers’ compensation, commercial auto liability, professional liability, and builders’ risk insurance policies. In certain cases, a roofing insurance policy may also be necessary.

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