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5 Must-Have Contractor Insurance Policies You Need

Nov 09, 2022

Business insurance

5 Must-Have Contractor Insurance Policies You Need

The construction industry involves dangerous work that can lead to damage and injuries. If the injuries occur to employees, they are covered under state-mandated workers’ compensation insurance. However, if bad luck happens to third parties on a job site, it can potentially lead to litigation.

Here are important types of contractor insurance policy that can save you from headaches associated with construction mishaps.

  1. General liability protection

    Many businesses commonly carry general liability insurance as a form of risk management and financial protection. This coverage pays for damage to third party properties, as well as lawsuits involving slander or libel.

    General liability coverage also pays for litigation costs associated with intellectual property. If your company borrows marketing language that closely resembles what a competitor has published, your competitor might sue your firm. General liability coverage pays for all legal costs and settlements.

  2. Builder’s risk coverage

    When your construction crew works at a client's site, members will be exposed to various risks. The threat of lost or damaged tools can hinder a construction worker's performance or shut down productivity until tools are replaced. Although a typical business insurance policy doesn't cover losses that occur outside your company's primary location, builder's risk coverage protects the value of these investments.

  3. Surety bonds

    Independent contractors or builders must be acquainted with surety bonds, which are regulated at the state level. Surety bonds are required in some states for certain types of construction work. Bonds can serve as guarantees to government that work will be done by a certain date. The bonds reflect large amounts of money that are held in a fund until services are completed.

  4. Commercial property insurance

    This form of basic insurance protects commercial property in similar ways that homeowners insurance does for homeowners. It protects the value of your assets that are stored on the property. Nature can sometimes destroy property unexpectedly, so it's a good idea to carry a sufficient amount of coverage. Fire and wind are just two ways a building can be degraded.

    Nonetheless, not all types of disasters are covered, as each commercial property insurance policy is different. You'll need to go over the details of risks the investment faces simply by reviewing your policy and discussing it with your insurance agent. If you occupy commercial space in a flood zone, you'll likely pay a high rate for flood insurance. The same is true with other severe disasters, such as earthquakes, hurricanes and tornadoes.

  5. Commercial auto insurance

    It's common for construction companies to hire multiple vehicles, and all states require commercial vehicles to be insured. For a fleet of vehicles, you can usually get a discount under one policy. This coverage will help your company avoid the high costs of litigation if an employee gets into a driving accident with a third party.

Consult with Fuller Insurance

In order to compete in the high-stakes construction industry, your firm needs a strong, detailed contractor insurance policy. It should be customized by you for your business. For more information about getting the right coverage for your contractor services, contact our team here at Fuller Insurance Agency.

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