The insurance needs of contractors have changed over the past several years. In some cases, this is due to industry trends and risks. In other cases, it is because of state or local contractor insurance requirements. Understanding the basic types of insurance is critical to choosing the right coverage for your needs.
Common Types of Insurance for Contractors
Like any business, contractors must follow applicable laws and regulations. For many, that means carrying certain types of insurance.
- Worker’s compensation: If you have employees, worker’s compensation is a common requirement. It covers the cost of medical expenses and can replace lost income if an employee is injured at work.
- General liability: In many places, you will be required to carry basic liability coverage. Even if it is not a requirement, it is a good idea to have a policy in place. This will protect you in the event a claim is made against the company.
- Construction insurance: Also known as builder’s risk coverage, this type of policy will cover losses to a building under construction if it is damaged by fire, theft, vandalism, or other, similar acts.
- Automotive insurance: All business vehicles should be covered by an appropriate auto policy. This will reduce your personal liability in the event of an accident.
The right insurance package will reduce your risk and lower your liability for accidents, injuries or damages. It is helpful to work with an agent who understands the needs of contractors to ensure you have the coverage you need.