One of the most often asked questions we come across is the one about contractor insurance coverage and how it differs from regular small business insurance. This sounds like the answer would be fairly simple, but that is not the case. While you will certainly want general liability insurance for small business to cover the basics, it is important to speak with a well-educated and licensed insurance agent that has knowledge of your industry in order to find the right additional coverage for your situation.
Having an understanding of Industry requirements is important
Each industry has its own specific regulations, which can heavily affect the types of insurance you will need as a contractor. For example, General Contractor is a broad label given to a wide variety of fields. This can include everyone from work site clean up crews to the basic “husband for hire” style of a handyman. That does not mean that a broad base coverage is going to suit your needs, however, there are some basic differences to keep in mind that can help to lead you in the right direction.
1. Contractor insurance often goes hand-in-hand with bonding.
Many contractors work within industries where you are required to be licensed, insured, and bonded in order to place bids on certain projects. While, yes, you could choose not to become involved in these projects, you are likely going to lose out on future prospects by doing so. That is why it is vital to know the regulatory standards of your industry through and through in order to avoid missing out on important coverage.
2. Contractors in each industry face risks that may not be covered by standard insurance.
The last thing any contractor wants is to find out an incident is not covered after the fact. This results in lost time, money, materials, and reputation. Depending on your industry, you may need to carry additional coverage for aspects such as damage resulting from work done, though this is pretty standard across many industries. However, the required amount of coverage can vary, so be sure you are covered by regulated requirements.
3. Contractors that do not handle labor intensive tasks have different coverage requirements.
Some may only require federal basics such as health and emergency medical. Be sure to ask your agent about any requirements that may need to be met, even with non-labor based industries. You certainly don’t want to be missing important coverage!
4. Contractors may have options available that other businesses do not.
Never leave out questions pertaining to parts and materials. Even though it may seem off-the-wall, these are things that could be covered under a special rider on your insurance. Ask about any additional options that could be selected, as everything you cover is protecting your bottom line and both yours and your clients’ pocketbooks in the long run.
Carrying at least minimum coverage is a must for any business
No matter what industry you work within, it is important that you obtain the right coverage. Whether you are a Journeyman, General Contractor, Writer, or even a Food Truck vendor, you need to be sure that all of your bases are covered in order to protect the future of your work. By taking just a little bit of time, you can be sure that you have the coverage you need when it matters the most.