Contractor Insurance: What You Need to Know

As a contractor, it’s important to protect your business from potential risks and liabilities that may arise during the course of your work. Contractor insurance can provide you with the coverage you need to protect yourself, your business, and your clients. To help you gain the information you need about contractor insurance, we’ll go over four main questions in this article: what it is, who needs it, what is covered under a policy, and how much it typically costs. Whether you’re a seasoned contractor or just starting out, understanding the importance of contractor insurance is crucial to the success and longevity of your business.

What Is Contractor Insurance?

Contractor insurance is a type of insurance that provides protection to contractors and their businesses from potential risks and liabilities that may arise during the course of their work. It can cover a range of things, such as property damage, bodily injury, and legal fees in the event of a lawsuit. Essentially, contractor insurance is designed to help contractors manage and mitigate the risks associated with their work.

Who Needs Contractor Insurance?

Contractor insurance is typically necessary for anyone who works as a contractor or owns a contracting business. This includes individuals or businesses involved in a variety of industries, such as construction, remodeling, electrical work, plumbing, landscaping, and more. Whether you’re a sole proprietor or a larger contracting firm, contractor insurance can provide you with the coverage you need to protect yourself and your business from potential risks and liabilities that could arise during the course of your work.

Additionally, many clients and companies require contractors to have insurance before they will hire them or work with them, making it a crucial component of any contracting business. It’s important to understand the risks associated with contracting to obtain the necessary insurance coverage to protect yourself and your business.

What Is Covered Under A Contractor Insurance Policy?

The specific coverage offered under a contractor insurance policy can vary depending on the policy and the insurance company. Contractor insurance is designed to provide protection for a range of risks and liabilities that are commonly associated with contracting work. Some common risks covered by contractor insurance include:

Property damage caused by you or your employees during the course of your work.
Bodily injury to customers, employees, or other third parties that may occur on the job site.
Accidents or injuries caused by faulty workmanship, errors or omissions, or negligence.
Theft or damage to tools, equipment, or other business property.
Legal fees and settlements associated with lawsuits or claims brought against your business.
Injuries or illnesses sustained by employees on the job.

There are some common types of coverage that can typically be included in most contractor insurance policies:

General Liability Insurance: This type of coverage can protect you from financial losses related to bodily injury or property damage that may occur during the course of your work.
Workers’ Compensation Insurance: If you have employees, worker’s compensation insurance can provide coverage for work-related injuries and illnesses.
Commercial Auto Insurance: If you or your employees use vehicles for work purposes, commercial auto insurance can provide coverage for accidents, theft, and other types of damage.
Professional Liability Insurance: Also known as errors and omissions insurance, this coverage can protect you from financial losses related to mistakes or omissions in your work.
Property Insurance: This type of coverage can provide protection for your business property, including your tools, equipment, and materials.

With limits and exclusions varying on every contractor insurance policy, it’s important to carefully review the coverage options offered by different providers to ensure that you have the appropriate protection for the unique risks associated with your contracting work.

How Much Does Contractor Insurance Typically Cost?

One of the most common questions that business owners have about insurance is how much it will cost. Unfortunately, there is no one-size-fits-all answer to this question, as the cost of contractor insurance can vary widely depending on a number of factors.

One of the biggest factors that can impact the cost of contractor insurance is the type and level of coverage you need. For example, a basic general liability insurance policy may be relatively affordable, while a more comprehensive policy that includes additional types of coverage such as professional liability, commercial auto, or workers’ compensation insurance may be more expensive.

The size and nature of your business can also impact the cost of insurance. For example, a small, one-person contracting business may be able to obtain insurance for a few hundred dollars per year, while a larger firm with multiple employees and a more complex set of risks may need to pay several thousand dollars per year for adequate coverage.

Your location can also impact the cost of contractor insurance, as insurance rates can vary significantly by state and region. Additionally, your claims history and the level of risk associated with your specific line of work will affect the cost of an insurance policy.

To get an accurate estimate of the cost of insurance for your business, it’s important to work with a reputable insurance agent and to obtain quotes from multiple sources. By comparing the terms and prices available, you can find the right insurance package that meets your needs and fits within your budget.

Let us help you protect your business with contractor insurance and keep your mind at ease. At Tivly, our goal is to help you find protection for your business as efficiently as possible by matching you with the right insurance provider. Simply give us a call at 877-907-5267 or complete the form above and one of our specialists will contact you right away.