Contractor insurance
Get a Free Contractor insurance Quote Online!Contract work is still one of the foremost ways to undertake a construction or building project. In addition to all the risks of working in construction, there are several legal differences and specialized coverage for contractors. Because they qualify as their own entity, specialized insurance based on the project size and risks is essential.
That’s why contractor insurance is broken up into three tiers to make defining coverage easier. Tier 1 tends to be the essential coverage for more general construction and contract jobs, while Tier 2 and 3 tend to be more in-depth and more risk-specific. It can seem like a lot to digest and to pay for too. Fortunately, Insurance Navy is here to make contractor insurance more accessible and affordable.
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The best Contractor insurance for your contracting business
Contractors face several physical and legal damages while at a job site. Other than the fact that all occupations have to carry insurance to some degree, contracting is a case where even the least commonly bought and more specialized commercial coverage for these specific worksite risks. These can be the following:
- Damage that contractors cause to a third party visiting the worksite or project
- Property damage to the ongoing construction, specifically the structure in progress rather than to materials and tools
- Damage to equipment, materials, and tools being used for the project in question
- Injuries and damages that workers or employees sustain while on the job
- Damage to vehicles used for construction, material transportation, and more –will be required, like any type of auto insurance
- Damage to the project caused by pollution and other specific environmental damage that may be exclusive to a region
- Property damage by third parties can also occur if they aren’t careful along within property owned by the contracting company
- In an insurance sense, contractors may have to insure at least $2 million in coverage for larger construction projects which may require additional coverage
- Damages and injuries that can occur to equipment that the contracting company doesn’t own or workers that work for another third party
These are just some of the things a contractors policy can protect your business from
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How much does Contractors insurance cost?
Finding an average cost for any type of insurance is a challenge because premiums are such an extremely personal thing. It’s not too often that two people or entities pay the same amount for insurance because they require different amounts.
However, it’s been reported that independent contractors tend to pay about $344 annually for just general liability insurance. A business owner’s policy is a budgeted way to get essential coverage like liability, property damage, and business interruption insurance in one package. This can cost about $500 annually.
So, the exact amount you would pay for contractors' insurance depends on the coverage you will need. Which, in turn, depends on the size and scope of the ongoing project. There’s really no way to offset the risks like you would with car insurance with contractors' insurance. So, the smallest worksites and teams of workers will have lower contractor premiums than the larger ones.
Essential Contractor insurance
The following insurance coverages make up Tier 1 of contractor insurance. These are the essential insurance types that several contractors simply must carry, if not at least consider. Compared to most building or construction projects, these would be for the smaller ones, nor are there major assets that could be damaged or lost. In other words, every contractor is at least Tier 1 and will need the following types of insurance coverage.
General liability insurance for contractors
Contractors often allow clients and other parties to visit the project in progress. During this time, their protection is essential in the event they are injured while on worksite grounds or have their property damaged.
Of course, general liability is made to cover more than just that in a business context. Any liability damage as a result of advertising or other company endeavors is also insured. The three areas of coverage that liability insurance are personal medical costs, property repairs/replacements, legal costs in the event of a lawsuit, and even lost income if the injured third party can’t go to work while in recovery.
As a third-party company or entity themselves, this is perhaps the most essential coverage that contractors can have. Lawsuits tend to be harsher toward independent workers, so insurance that is meant to protect a business from legal fees is more than necessary.
In a construction context, this coverage can also go hand-in-hand with workers using heavy machinery and even construction vehicles like a bulldozer. There is always the chance that they can end up damaging something that they didn’t mean to. Simply put, every business needs general liability regardless of the field or industry.
Operations insurance for contractors
This coverage also goes by the name products and completed services since it’s a necessary coverage for any company or entity providing a service or product. If something were to happen or go wrong on account of that service or product, then that could lead to some significant damage.
Contractors and subcontractors are providing the service of assembly and construction and, thus, are subject to Murphy’s Law of everything going wrong while doing so.
Operations insurance is useful because contractors don’t have to cause damage at the worksite to being entitled to the coverage it offers. This can be at headquarters or on a supply run before heading to the site.
Operations insurance comes in two variants –in progress and completed. As you can infer, in-progress coverage provides protection to the construction project and any resulting damages while it’s incomplete. When it is finished, and there is still minor work to be done, then completed operations insurance provides the same protections to it. This can be especially useful for contractors heading multiple projects at different points in the construction process.
Equipment insurance coverage for contractors
After covering damages that can occur at the work site, it’s time to cover equipment used for the work at the site with contractor equipment coverage. This insurance doesn’t just cover hand tools that can be stolen or damaged but also the heavier machinery like cement mixers and even building materials in transit to the site. This is also referred to as inland marine insurance.
Equipment and building materials can cost a lot to replace if damaged or lost; that’s why equipment coverage is one of the foremost insurance types for contractors. Equipment coverage also provides protection wherever the tools are taken, so it’s not limited exclusively to the work site and hours.
Even new incoming equipment that hasn’t arrived yet is subject to equipment coverage insurance. A project is as good as the materials and tools being used; it’s always important to make sure they are financially protected.
Workers compensation insurance
Another major business insurance that is essential regardless of industry is workers’ compensation insurance. Any business that has employees simply must have insurance for their workers in the event they are injured, suffer property damage, or press legal charges.
Compared to other occupations, those that work in construction and building are subject to much more risks and hazards, especially when it comes to slipping and falling.
Employees can also file lawsuits due to alleged malpractice and wrongful termination, which can more than set a company in the red. Workers’ compensation also comes in to cover expenses relating to damages such as this.
A construction worker’s pay is also a priceless thing, especially if the job is a grueling one. It’s equally as important to insure their wages should an injury force them to miss work days for a period of time. Employees and workers play the biggest role of all in a construction project’s quality as quite literally the backbone of the operation.
Commercial car insurance for contractors
Even the smallest businesses have at least one set of wheels they use for work or have registered with the company. Car insurance is required for any registered vehicle, regardless of whether its strictly used for commercial purposes.
A contracting company can have a van or truck used for transporting materials and tools to a work site. During that time, standard or personal car insurance won’t cover it. That’s why there is commercial car insurance readily available as much as standard car insurance.
There are several add-ons and extensive coverage for vehicles. The main insurance is to cover any injuries or damage you or an employee cause to another driver and car while out driving to and from work sites.
If your contracting company rents or leases vehicles, then a non-owner commercial auto policy will do the trick. As with personal car insurance, comphrensive and collision coverage can also be added on for full coverage.
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Additional contractor insurance coverage
The aforementioned insurance types are typically part of Tier 1 of contractors' insurance for any small job and beyond; they are the bare essentials. Bigger jobs or several at once tread into Tier 2 and 3 territories.
These Tiers include the more specific and in-depth coverage that a contracting company may need when dealing with significant projects. These are the following insurance coverages.
Contractors property insurance
If a contracting business doesn’t lease or rent a location, then they more than likely operate out of someplace they own. Like any other business or commercial location, property insurance will be necessary to insure the building and any property are kept within.
If it’s the case where a business rent or lease a space, then property insurance may not be necessary and will be the landlord or actual owner’s responsibility. Storage facilities meant for tools and building materials can also be included in a contractors insurance.
Umbrella insurance
Umbrella insurance is used to extend coverage to higher-value properties or assets. This can especially be the case with large, expansive construction projects. The usual coverage limit cap is around $1 million, but projects worth more than this will qualify for umbrella insurance. Contractor umbrella policies typically have $2 to $5 million worth of coverage limits for such undertakings.
Leased equipment insurance
The reason to have this type of contractor insurance is pretty self-explanatory based on the name. Some contractors may lease the equipment they work with. This can especially be the case if heavy machinery like an excavator, crane, or bulldozer.
Leased equipment insurance is there to cover any damage, theft, or loss of the equipment in question while in the care and use of the contractors. Equipment can also be leased by contractors in order to offer an additional service. Similarly, there is also hired and non-owned insurance to help cover third parties enlisted by the contracting company for a specific job.
Employment practices insurance
This is another type of business coverage that everyone should at least consider if they have employees or workers. While workers’ compensation covers damages to them from work, employment practices insures any damages that they may cause to work.
This can include instances of misconduct, wrongful termination, and actions that would otherwise put the business at risk. This is an extremely helpful insurance to have if your contracting business is growing and changing quickly.
Pollution insurance coverage
Damages can occur to a construction site or work in progress if waste materials contaminate building materials and other tools. Some contractors are in charge of disposing of the waste from a work site.
If something like a spill were to happen on the way to the waste plant, for example, then pollution or environmental insurance comes to the rescue to cover the ensuing damages. This is typically the case for larger contracting jobs.
Contractor errors and omissions insurance
E & O insurance, or professional liability, is there to insure any resulting damages if a job or professional service isn’t done right or to the customer’s specifications. This can happen when it comes to the building, which is why every measurement must be so precise. When added to a contractors insurance policy, E & O insurance can also cover any subcontractors that do a poor job under them.
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Contractors insurance from Insurance Navy
Contractors can find the world of insurance made easier and more affordable when they get their policy with Insurance Navy.
We pride ourselves on our competitive approach to any kind of insurance premiums while prioritizing any budget. This is the same approach we have been using for car insurance which has led to us having the most in-demand low premiums.
Start today with a free online quote for your contracting business and see how much you can save on commercial premiums with us as a policyholder.