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Like any business, independent contractors need insurance to protect themselves financially. What type of insurance you need depends on the type of work you do.
The construction sector continues to be ranked among the most hazardous in the United States, making versatile and robust loss control measures essential. Even the most experienced professionals may eventually commit errors or be involved in incidents that could incur significant expenses and financial losses. Fortunately, contractors insurance can provide a reprieve.
What Types of Coverage Are Included in Contractors Insurance?
Your business should first understand that contractors insurance may not be available as a single product. Instead, you may need to assemble your own coverage portfolio by combining several policies. In many cases, the following types of insurance should be considered:
- General liability insurance can help your business pay for third-party losses for which it is responsible, such as bodily injuries and property damage.
- Commercial property insurance may provide financial protection for your physical assets, including structures, equipment, tools and inventory.
- Workers’ compensation insurance can render financial aid if your employees are injured on the job or develop work-related illnesses, including for medical bills, lost wages and, in the event of a lawsuit, your company’s legal costs.
- Business interruption insurance may provide compensation if a covered incident disrupts your operations, such as recouping lost income, keeping up with loan payments, and maintaining payroll.
- Builders risk insurance may help your business recoup financial losses related to buildings under construction.
- Commercial auto insurance can offer financial assistance if your business’s motor vehicles are involved in an accident or otherwise damaged.
- Inland marine insurance may financially protect your company’s equipment and materials while in transit or stored on a job site.
- Commercial umbrella insurance can provide a secondary layer of liability protection if the coverage limits of other policies are exhausted.
Are There Any Seasonal Considerations for Contractors Insurance?
Many businesses experience ebbs and flows in their activity levels throughout the calendar. As a contractor, it’s not uncommon for work to pick up during certain times of the year, such as the summer months. With this in mind, acquiring temporary coverage solutions, such as short-term liability insurance may be possible. However, while avoiding premiums during slow times may be tempting, being underinsured at any time could jeopardize your business’s financial security. Furthermore, frequently starting and stopping coverage could lead to insurance companies charging you higher rates.
What Factors Affect Premiums for Contractors Insurance?
Your contractors insurance costs may vary significantly depending on your unique circumstances. When assessing your coverage needs and determining rates for adequate policies, insurance companies may consider the following criteria:
- Services offered
- Business assets
- Annual revenue
- Number of employees
- Claims history
- Portfolio details (e.g., coverages purchased, deductibles and policy limits)
Get the Right Coverage
With nearly 40 years of experience serving businesses, families and individuals in the Denver area, JJ Insurance is well-equipped to help you assess and address your coverage needs. Contact us today to get started.