There is coverage provided for contractors which are called “ business insurance for contractors ” it’s sometimes called “contractors insurance.” In this type of insurance policy, there is coverage provided by the insurance providers to cover up the financial loss in the business property and its workers/ employees.
Without much adobe, you will find you will be able to find out the importance of this insurance to general contractors.
What is business insurance for contractors?
From the name ‘business insurance for contractor’ it’s a type of insurance policy designed solely for contractors. With this, you can have peace of mind as a business contractor in handling or receiving huge business contracts in case of any legal action against your business would be settled by the insurance provider.
Who needs contractors insurance?
Not everyone needs this kind of insurance, but you can only be in need of this type of insurance if your line of business falls into any of these categories listed below.
- HVAC specialists
- Drywall contractors
- Construction workers/firms
This type of insurance was designed only for business that has to do with offering of hand-based services, ranging from fixed appliances to woodwork and welding.
How contractors insurance covers your business: the major type of coverage they provide.
While opting for business insurance, there are basically different factors for you to consider when shopping around. Here is the major coverage you will need for your contracting firm:
1. General Liability Insurance.
In this coverage, the liability (read as financial losses and expenses) that your contracting firm will be handling will be covered by the insurance company.
With the general liability insurance, your company will be covered against any financial expense incurred from lawsuits filed by the third-party who got injured by your property.
It’s necessary to get this type of coverage for your business to protect it from what is termed “completed operations liability.’ This type of liability of financial expense is activated when your client observes that there is a damaged or malfunctioning appliance or installation done by your contracting company.
Note: A general liability insurance is only limited to third-party bodily injuries and property damages. Thus if your employee gets injured in the process of working, the coverage doesn’t provide anything for them.
2. Commercial property insurance
In the course of work, there might be some damages incurred, this type of business insurance for contractors only covers such damages caused by the company’s properties. This policy extends to the leased of the company and properties owned by the company.
This type of business insurance policy can vary by insurers, because they may have different types of damages which are protected by the policy.
3. Professional Liability Insurance
Among other business insurance policies, this is known as the most popular business insurance policies for contractors. With this, your business or contracting firm will be able to foot the expenses of making a reimbursement or redoing the job.
The term of a professional liability insurance state that a client of a contracting firm a lawsuit for an unfinished contract. The client can make a claim if he or she is not satisfied the quality of the work that is done by the contracting company.
In a situation like this, the insurer will foot the bills for either redoing the job to the client’s taste or refunding the client which was paid by the client for the job.
4. Business Interruption Coverage
In a situation where by your business is halted due to office renovations or relocation, the finances wouldn’t be in a bad shape. This is when the business interpretation coverage will provide coverage to the basic financial ends of your business during its temporal closure.
Depending on the insurance company, the reasons why the claim is made for this coverage can range from expenses made due to damaged equipment and theft of business-related property.
5. Workers Compensation Coverage
In this type of business insurance for contractors, there is provision for financial protection of your employees. The policy provides an option for the employees to file a claim if they got any bodily injury in the process of working for your company.
There is a coverage on the medical bills provided by the worker compensation insurance policy if your employees get sick and there ailment is within the terms of thee policy.
Alternative Business Insurance Policies for contractors
When are done with the most-popular and most-bought types of business insurance for contractors. However, there are different others that are capable to guide and protect both your business equipment and properties. These include:
Tools and equipment coverage
This was formerly known as “Inland Marine Insurance.” It was designed to cover business-related-equipment during the transportation from one location to another. The policy also provides for the financial reimbursement for theft of business related equipment.
Commercial Auto Insurance
This is where your company-owned vehicles get their coverage, whether they encounter an accident or the vehicle got stolen, with the commercial auto insurance, your company vehicles get cover and you have nothing to worry about.
The commercial auto insurance will only provide coverage to the vehicle you that are being used for business-related movements. This can be the vehicles used for transporting business equipment, conveying company staffs of workers and also conducting business-related activities in the vehicle. But any private vehicle owned by the company’s staff is not under such coverage.
Auto insurance companies may have different views and terms for the company’s car that got involved in an accident while been used by an employee.
Builder’s risk Insurance Coverage
There is a lot of risk attached while working with as a contractor or providing contracting services. For instance, a property which belongs to your client may get damaged by your employee in the course of working in the premises.
When event like this happens and you don’t have an insurance policy, your business may get a lawsuit requiring it to fix the damages it made. This alone can drain your company’s finance.
What do you do? Get a builder’s Risk insurance policy. This is a policy that will cover your business from making expenses towards the damage or loss of client’s property during the course of working on the property.
Business Insurance for Contractors-Conclusion
As a business contractor, it’s advisable to have all the legal backups for your business to keep the business safe in case of unforeseen circumstance that may cause you great loss.
Having business insurance for contractors is a great way to start. It protects everything that has to do with your business and keep your business safe.