Contractors can get hit with significant legal expenses and compensation claims if they need the right insurance. Contractors typically need a combination of policies, including commercial auto, business owners policy (BOP), and workers’ compensation. Some contracts also require specific additional insured endorsements.
Protection against liability
Contractors insurance Woodbridge, VA can help businesses avoid bankruptcy in the event of a lawsuit. It can also cover expenses associated with shoddy work and help you meet project requirements for being “bonded and insured.” The type of coverage you need depends on the size of your business but typically includes the following:
- General liability insurance.
- Workers’ compensation insurance.
- Commercial auto.
- A builder’s risk policy (to protect property from weather or other events while a building is under construction).
- Excess liability.
Some policies include specialized coverages such as contractors’ E&O and pollution insurance. Most small- to medium-sized contractors need a business owner policy (BOP) that bundles general liability with workers’ comp and property coverage in one affordable package. Larger firms might consider a more comprehensive policy that adds professional/pollution liability, employment practices, and other endorsements.
Coverage for equipment and tools
Your business relies on specialized equipment to get work done, so having proper insurance coverage is essential. Contractor insurance helps cover the costs of repairing or replacing your tools and machinery if they are damaged by an accident or natural disaster or stolen from your work site. This includes small tools like screwdrivers and more expensive equipment, such as computers and vehicles.
This type of coverage can also be extended to include business income, which covers your loss of earnings if your equipment isn’t working. General liability insurance may be included in your contractors’ policy, along with other business insurance policies such as workers’ compensation and property damage insurance.
You may also need to add insured endorsements to meet the requirements of specific projects, significantly larger ones where the project owner requires a specific insurance policy. Thimble can help you find the right contractor insurance for your needs. We have a quick and easy process to compare quotes from multiple providers so that you can save time and money on the coverage your business needs.
Coverage for business interruption
Typically, business interruption coverage pays to replace income lost due to a covered loss, such as a fire. It may also cover expenses associated with operating in a temporary location, such as rent for a cafe that loses its space after a fire.
For example, a contractor who owns a restaurant might use the extra expense coverage to help pay for renting a new place to operate, paying estimated taxes that were due before the fire (if he was obligated by contract to do so), or the cost of communicating with his customers about his temporary location. Insurance professionals can often customize this coverage for the needs of a particular business.
A contractor’s business insurance policy usually combines three important coverage types: business owner policy (BOP), general liability, and commercial property. It’s generally cheaper to buy these coverage types together than separately. Insurers may also offer discounts if a company implements a safety program.
Coverage for property damage
A good contractor’s insurance policy will combine the most essential coverage types that meet the specific risks faced by contracting and trade businesses. This usually includes a business owner’s policy (BOP), workers’ compensation, commercial auto insurance, and general liability. It may also include contractor errors and omissions (E&O) insurance and inland marine.
Inland marine insurance is often included in a contractor’s insurance policy to protect equipment that is temporarily in the possession of a customer or on its way to the job site. It also covers tools and materials stolen from your vehicles or work sites. If you have a small or medium-sized contracting company, the simplest option is to get a BOP that bundles general liability, commercial property, and workers’ compensation into one insurance policy.
This can save on costs and time. Larger companies may need other policies, such as contractors all risk (CAR) insurance, to cover damage caused by construction or renovation to the buildings or structures they are working on.