What types of insurance should a contractor carry?

Posted On Thursday, 21 January 2021 20:54

Whether you own a contracting business or are a customer looking to hire a contractor, you are aware that being a contractor or working with one carries inherent risks. This is simply due to the fact that by the type of job that a contractor performs, there are many possibilities for people to suffer injuries or for properties to withstand damage. And if these damages or injuries take place at the job site, it is quite likely that the contractor will be facing a legal claim.

In order for a contractor not to face the risk of having to deal with a claim by paying for damages out of their own pockets, they must protect themselves by carrying enough insurance coverage. This will allow them to settle a claim while continuing to perform the duties associated with their jobs.

What are the main types of insurance that a contractor should consider carrying?

Here are the main types of insurance that every contractor should carry:

Commercial General Liability Insurance

Having a commercial general liability insurance policy is something that no contractor should be without. These policies offer coverages against claims brought by third parties for incidents that took place while carrying out contracting work. These could either be personal injuries or damages to property. Besides paying the amount of compensation needed to settle the claim, these insurance policies also cover legal expenses associated with any litigation.

Worker’s Compensation

This insurance policy would cover any accidents that happen on the job to the contractor’s employees. These policies generally cover medical treatment, disability income, costs incurred during rehabilitation, and, in cases of work-related deaths, compensation to the family of the employee who lost their life.

Automobile Liability Insurance

This policy differs from traditional car insurance since it takes into account that contractors generally transport larger and heavier equipment in their trucks. This could cause property damage, bodily injury, and even death to someone at the construction site.

Builder’s Risk Insurance

This policy protects builders from the loss of materials or equipment that could get damaged, stolen, or lost on a construction site. It is generally provided hand-in-hand with a contractor’s general liability insurance policy and is also beneficial for subcontractors and other equipment owners that are involved in the project.

Pollution Insurance

Contractors are expected to fully follow environmental laws that are in place. If their activities generate pollution, they may be sued by third parties for violating environmental laws. Not having this insurance and being sued could be detrimental to their business.

Roofer’s Insurance

If a contractor engages in roofing jobs, they must carry this policy in order to protect their workers should they be involved in a workplace accident that leads to injuries, loss of life, or property damage. This is an important policy to have due to the height at which all roofing jobs must be performed.

This is just a basic list of policies that a contractor must carry. It is understandable that home remodeling contractors in Miami might consider that carrying all of the above policies might represent a great financial burden to their businesses. However, not having the right insurance when an accident takes place or a client’s property gets damaged may result in catastrophic consequences that may have them shutting their doors for good.

On the other hand, if you are a customer looking to build or remodel your house, it pays to take the time to have a consultation with your contractor. You not only want to make sure that they have the required experience to do the job but also carry insurance.

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