Liability Insurance for Contractors
Contractor’s Insurance is an important asset to limit risks that come with operating a business. Contractor Insurance protects you and your business from claims related to bodily injury, property damage and other claims protection outlined in your policy. Whether you are offering plumbing services or programming services to other businesses you need a line of defense from claims arising from third parties. Many 1099 contractors & freelancers do not consider themselves self-employed. If you contract your services to other companies and receive 1099 you should consider contractor business liability insurance. Today’s business environment has become very litigious. The benefits of having contractors insurance far outweigh the cost of the low to modest premiums.
Contractors Insurance, Who needs it?
Who needs Contractors insurance also called general business liability insurance? Plumbers, Electricians, Roofers, Janitorial, Lawn Care & Landscaping companies, Carpenters and others in the skilled trades. Web designers, programmers, consultants and other professionals that work independently and/or receive a 1099 tax form. Whether you are working independently or as a sub-contractor failing to have coverage could lead you exposed to lawsuits. Example, failing to deliver a time-sensitive project on time, you could be sued by the “employing” company for breach of contract and any related financial loss. Additionally, you may be sued even if you deliver your services on time. It is often the case that plaintiffs sue all parties related to a contract. If you work exclusively for one client, you can ask if its possible for you or your business to be added as an additional insured to the business liability insurance policy of your client.
General Liability Insurance may also be needed to secure any commercial leasing space. Additionally, many of your prospective business and government clients will want to validate your insurance coverage before entering into contracts. The request for insurance verification isn’t coming from your business or government clients but many savvy residentially clients are asking for verification of bonds and insurance. After being burned by contractors with inadequate or no insurance, consumers are rightly protecting themselves.
The requirements for Handymen to have insurance vary from state to state. Most handymen perform a variety of tasks and have exposure to multiple types of risks. Customers often make requests and don’t have the proper budget and want you to take shortcuts. Protect yourself and walk away. Conversely, they change the scope of the project to be much more involved and complex without notice. If you only have residential customers and perform basic services and your state does require coverage than you may not need to purchase business liability insurance. However, if you perform complex services or have commercial clients than you definitely need to limit your risks by having an insurance policy.
What does Contractors Insurance Cover?
- Bodily Injury – Your customer trips over your extension cord and breaks his leg. As a result, client incurs medical bills and lost wages. The insurance coverage would pay the claim subject to the policies terms and conditions.
- Property Damage- Customer property is damaged by your employees while completing a project. The insurance coverage would pay to repair or replace the property.
- Personal Injury- Covers slander if you or an employee speaks falsely about a client and damages their representation. Also covers copyright infringement claims by third parties.
It is important to keep in mind that your contractor’s insurance policy will be tailored to your particular industry and company. Please be sure to thoroughly read through the policy to identify what the policy does and does not cover.
Cheap Contractor’s Insurance
Before discussing where to look for insurance, it is important to note that price can’t be the only parameter you judge a policy by. The strength of the company standing behind the policy is the company highly rated and stable. What the policy covers and any (exclusions) the policy has. It is very important to understand what is excluded from the policy to determine if additional or alternate insurance is necessary. Some of the factors that affect policy premium:
- Limits of policy what is the maximum amount the insurance will pay for a single claim and multiple claims
- Term- How long is the policy in effect. Most terms are 12 months
- Deductible- How much will you pay before the insurance kicks in
- Industry-Different industries have different risks and are priced accordingly
- Number of employees- The more employees the greater the potential risks
Where to Start
Start your search for Contractors Insurance by getting a quote online. Insureon, State Farm, and most insurance carriers have business policies available. You should start by getting a free no obligation from Hiscox Insurance. We have completed an extensive review of Hiscox beginning with AM Best that gives the company an A(Excellent) rating. The Better Business Bureau reported an A+ rating and over 65 years in the business. We are so confident that we established an affiliate relationship where we may receive compensation from users we refer at no additional cost to you.
JefScot provides solutions to small business in the areas of website design and hosting, direct mail, e-mail and online marketing and general business consultation. It is our mission to provide affordable solutions. Solutions that don’t compromise on quality. Please take advantage of $50 off any of our services. Please see our Solutions Page. Use the code: Business2018 at checkout.