Contracting companies can use contractors’ insurance as a risk management tool, as this coverage addresses the financial losses that could accompany a disaster or accident. In exchange for the price of a premium, the insurance provider will extend financial reimbursement to specified incidents that fall under the contract terms. Each contractor’s insurance policy comes with its own inclusions and exclusions, making it a unique way to address your company’s specific risks.
Two Types of Coverage
There are many aspects of contracting work that is considered a risk for the business owner. However, there are two primary types of coverage within the scope of a contractor’s policy.
- Liability: Even with great attention to safety, it is highly likely that accidents will still happen. If your contracting work causes damage or harm to another person’s property or to an individual, a lawsuit might be the result. Liability insurance will pay for the risks associated with an accident. The policy will have a payout limit, and it will also help if a settlement is awarded against your company.
- Property: You need a selection of equipment, tools, and other property to run your contracting company, and disasters like theft or fire can destroy these assets. Property insurance will pay to replace or repair damages that occur to personal property that has occurred under covered clauses.
With so many liabilities, contractors’ insurance must be unique to your company. An experienced agent will help you evaluate your coverage needs.