To make it as a contractor, you need more than just entrepreneurship talent and skills. Good business acumen in your line of work calls for a practical plan to cope with the unforeseeable, especially loss-causing events. Day-to-day, many things could go wrong, from injury liability lawsuits and asset losses to equipment malfunction and missed business opportunities. As explained below, contractors insurance is one of the most effective ways to mitigate these risks and avert substantial financial losses.
Categories of Insurance for Contracting Businesses
Having a commercial insurance policy for your contracting work requires you to pay a specific premium. In essence, you’re investing in financial protection against multiple events listed in the insurance contract. This policy provides two broad coverages, namely:
- Liability coverage: This protection becomes useful when you’re accused of causing injury to a third-party or damaging someone’s property while working. Liability insurance can cover significant costs associated with such claims or lawsuits against your company.
- Property insurance: You’d need this to cover your contracting company’s equipment, office building, and other assets against damage or theft. The policy can pay for the repair or replacement of your damaged or lost business property.
Why It Makes Sense to Have Contractors Insurance
Reasons to get this commercial insurance policy include:
1. To make the most of business opportunities
You want to win as many bids as possible to optimize business and revenue growth. However, the clients looking to hire you are aware of the liability risks involved, and they may require you to show proof of adequate insurance protection. As a result, they might not give you any business unless you have coverage against property damage and injury claims. Backing up your bids for work with business insurance for contractors increases your chances of success significantly. By investing in this policy, you’re boosting your competitiveness in the bidding process.
2. To cover liability claims and lawsuits
While most liability claims against contractors are unforeseeable, they’re usually costly. There’s never telling when a client may sue you or your employee for causing damage to their property, such as their roofing or landscaping. Injury to clients or bystanders can also impact your contracting business’ financial health, especially when huge medical bills are involved. Sometimes, you may be accused of defaming someone based on comments you made online or otherwise published. Such accusations may result in substantial slander or libel damages against your company. The general liability component of your commercial insurance policy can protect your business when facing such claims or lawsuits. It can cover expenses such as:
- Your attorney’s fees
- Out-of-court settlements
- Compensatory damages
3.To cover workers’ injuries
Your employees are constantly at risk of serious injury, whether you’re a plumbing, electrical installations, or construction company. This is why you should add workers’ compensation coverage to your contractors insurance. The policy can cover medical expenses and lost wages when any of your employees is injured on the job. Consider getting disability insurance to cover personnel who sustain more serious injuries while working for you.
4. To cover your mission-critical machinery
When any of your key contractor equipment breaks down, you need it to be back up and running as soon as possible to avoid stalling ongoing projects. Optimal machinery uptime lets you keep your clients happy and generate more revenue. With an equipment policy in place, you can quickly pay to repair or replace your faulty machinery. It’s a practical safety net to minimize business interruption when mission-critical tools stop working.
You can avoid potentially business-crippling financial troubles with these key insurance coverages for contractors. To learn more about contractors insurance in Seattle, WA, contact us at Humble & Davenport Insurance today! We’re here to help you address your commercial insurance needs cost-effectively.