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Contractor Insurance

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Contractor insurance provided by Barnard Donegan Insurance.

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Contractor insurance isn’t one-size-fits-all. A specialized policy allows you to easily customize and simplify your insurance coverage to ensure that your business’ unique needs are protected.

Coverage for every type of contractor.

A specialty contractor insurance policy is an easy way to cover multiple risks without having to settle for a one-size-fits-all policy that wastes money on coverage you don’t need. There are a variety of options available depending on what type of contracting work your business does. From general contractors to HVAC technicians, plumbers, carpenters, electricians, painters, and the like, specialized contractor insurance can ensure your business has the right level of coverage.

The benefits of general liability for contractors.

A good policy includes general liability that covers you against claims of damage or injury caused on site or to visitors on your own premises. Such costs can be immense and general liability insurance is often mandatory if you want to bid for government contracts.

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Contractor
Commercial General Liability Coverage
Risk Factor

As a contractor, your business may be susceptible to many risks, such as claims due to bodily injury, property damage, personal injury, and more. And, if you hire other contractors to perform work on your behalf, you can be held responsible for any damage they cause on the job.

Solution

Commercial general liability insurance is an absolute necessity for every contractor. This type of protection provides broad coverage for premises, operations, products, and claims to third parties or property when you are deemed responsible and liable. It will also pay to defend any covered lawsuit or action regardless of its merit.

Commercial Property Coverage
Risk Factor

When a fire, theft, or another type of disaster strikes, your commercial property and everything within it can suffer a significant loss. This can have a detrimental effect on your business.

Solution

Commercial property insurance can help protect the property your business owns and leases, including things like equipment, inventory, furniture, and fixtures. Whether you own your building or lease your workspace, commercial property insurance can be purchased separately or can be combined with other necessary coverage to protect your business’ physical assets.

Contractors' Equipment Coverage
Risk Factor

You’re constantly moving your tools from one job site to another, exposing your contractor business to potential loss due to damage or theft. And without your specialized tools and equipment, your job site may come to a screeching halt.

Solution

As a contractor, you need contractors' equipment insurance - a policy specially designed to protect your tools and equipment on the move. The policy will cover equipment for a variety of losses, including fire, explosion, vandalism, theft, collision with other equipment or objects and overturning. Unlike standard commercial property insurance policies, contractors' equipment insurance often covers losses caused by floods and earthquakes.

Builders Risk and Installation Insurance
Risk Factor

A building under construction is not covered under a standard building insurance policy or a home insurance policy since it is not a complete structure. As a contractor, you may be responsible for unique loss exposures related to buildings under construction such as the theft of building materials and high valued equipment such as generators and compressors.

Solution

Builders risk and installation insurance provides coverage for homes or buildings while undergoing construction, until they are completed. The policy covers the contractors’ interest in materials at the job site before they are installed, construction materials in transit designated for the contractors' equipment insurance–a policy specially and the value of the property being constructed until it is completed.

Workers’ Compensation
Risk Factor

If one of your employees receives an injury or becomes ill due to a work-related occurrence, you are required by law to have the proper coverage in place.

Solution

Workers' compensation protects your employees should a job-related injury or sickness occur during the course of employment. This coverage is required by law and may vary by area, so be sure that you understand your obligations for all physical locations where your business operates in and all physical locations where you hire your employees.

Business Auto Insurance
Risk Factor

As a contractor, you have many exposures associated with your business vehicles–owned or leased. With a fleet of cars, trucks, vans, or other types of vehicles used in the course of business, a single accident can potentially put your contractor business in financial jeopardy.

Solution

Business auto insurance provides coverage for vehicles owned or leased by a contractor and provides coverage for bodily injury, property damage, and other exposures, and could include comprehensive and collision coverage as well.

Hold Harmless / Additional Insureds
Risk Factor

If you are performing as a contractor on a construction project where other contractors and vendors are involved, you could be held liable for any damages or injuries caused by the other contractors or vendors, leaving you with costly legal fees and settlement costs. Your business needs to be protected against the risk of some other company, vendor or subcontractor causing damage to people or property of your mutual customer.

Solution

Consider having a contract in place with each entity that includes a hold harmless agreement in your favor. A hold harmless agreement provides that the entity will hold you harmless for any injuries or damage caused by their negligence. In addition, the contract should require that the entity list you as an additional insured on their policy. This may provide you with coverage under their policy for injuries or damage they cause if you are named in a lawsuit.

Commercial Umbrella / Excess Insurance
Risk Factor

Losses and lawsuits are quite common in the construction business, and settlements can be substantial. If your business is found to be responsible for damage or injury on the job site, you could be facing a large liability loss that exceeds the basic limits of your standard policy.

Solution

You should consider purchasing a commercial umbrella insurance policy which provides higher limits, typically between $2,000,000 and $10,000,000, and often broadened coverages. Coverage is extended over various policies, including general liability insurance, business auto, and directors and officers liability insurance.

Protection for the equipment you use.

You should also make sure that you protect your stock, machinery, and equipment against damage or loss from fire, theft, flooding, and other risks, both on-site and off-site. Just as importantly, you need to have insurance coverage against loss of income if you are unable to carry out work because your equipment is damaged.

Coverage for your employees.

Remember also to get workers’ compensation insurance, which is usually mandatory and protects employees against lost income and medical bills resulting from workplace injuries. You might be worried that the costs of a workers’ compensation policy will be high given the inherent risks of construction work, but many insurers will offer discounts if you follow safety programs.

If you need any help choosing the right contractor insurance policy, contact us today.

FAQs – Contractors Insurance

What types of insurance coverage do contractors need?

Contractors, such as electricians, HVAC technicians, and plumbers, typically need general liability insurance, workers’ compensation, commercial auto insurance, tools and equipment coverage, and professional liability insurance. The specific coverage depends on the services you offer and the risks involved in your work.

Why is general liability insurance important for contractors?

General liability insurance is crucial because it protects your business from third-party claims of property damage or bodily injury that occur on the job. For example, if you accidentally cause damage to a client’s property or if a third party is injured at a job site, general liability insurance will cover the associated legal and medical costs.

Do I need workers' compensation insurance for my contracting business?

Yes, workers’ compensation insurance is required by law in most states if you have employees. It covers medical expenses and lost wages if your employees are injured on the job. This is especially important for high-risk professions like HVAC technicians, plumbers, and electricians, where physical labor and hazardous environments are common.

What does tools and equipment insurance cover?

Tools and equipment insurance covers the repair or replacement of your tools and equipment if they are lost, damaged, or stolen. For contractors who rely on expensive tools for their work, this coverage ensures that your business can continue operating without significant financial loss due to damaged or missing equipment.

Do contractors need professional liability insurance?

Professional liability insurance, also known as errors and omissions insurance, is important for contractors who provide design, consultation, or advisory services. It protects you if a client claims that your work was negligent or incomplete, leading to financial losses or further damage.

Why do contractors need commercial auto insurance?

Contractors often use vehicles to transport tools, equipment, and employees to job sites. Commercial auto insurance covers accidents, damages, and injuries that occur while using work vehicles. It’s essential for any contractor who operates a fleet or even a single vehicle for business purposes.

Can I bundle different types of insurance for my contracting business?

Yes, many insurance providers offer package policies or bundling options that allow contractors to combine general liability, workers’ compensation, commercial auto, and other coverages. Bundling can help save on premiums and ensure that all aspects of your business are adequately protected.

What is the difference between general liability and professional liability insurance for contractors?

General liability insurance covers bodily injury, property damage, and other third-party claims, while professional liability insurance covers claims related to errors, omissions, or negligence in your professional services. General liability is important for all contractors, while professional liability is more relevant for those providing advisory or design services.

How much does contractors insurance cost?

The cost of contractors insurance depends on several factors, including the size of your business, the type of work you do, your geographic location, the number of employees, and your claims history. Contractors in higher-risk trades (like electricians or HVAC technicians) may have higher premiums due to the nature of their work.

How do I determine the right amount of insurance coverage for my contracting business?

The right amount of insurance coverage depends on the specific risks your business faces. An experienced insurance advisor can help assess your business’s needs based on factors like the size of your business, the services you offer, the number of employees, and the value of your equipment. Customized policies ensure you’re fully protected without paying for unnecessary coverage.

Meet Your Advisor

Tom Hewitt
Construction & Contractor Advisor


830-303-8300 x 1508

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Meet Your Advisor

Matthew Radtke
Construction & Contractor Advisor


830-303-8300

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