With so many insurance policies available, offering a variety of coverages and protections, it can be both confusing and overwhelming to try and navigate this world and choose the best policy for your needs.
Thankfully, the following information will highlight five tips to keep in mind as you purchase an insurance policy as a contractor:
1. Identify Your Specific Risks and Liabilities
Take the time to properly evaluate your business and assess the potential risks and liabilities you may face. It does you no good to minimize these risks lower than they are in reality, either, as you want enough coverage to protect your business against any number of risks.
2. Understand The Different Types of Insurance Coverage
There are several types of insurance coverage for contractors. This includes general liability, professional liability, workers’ compensation, and commercial auto insurance. It’s important to understand each type of coverage and what it protects against to determine what types of coverage would benefit you the most. The following is a more in-depth breakdown of these common types of coverage:
General Liability
General liability insurance is one of the most common types of coverage for contractors. It protects against property damage, physical injury, and other instances that happen during a job. It pays compensation for injuries and also covers legal expenses derived during litigation. This is immensely important coverage as not having this can mean the end of your business if someone is hurt on your job site. Virtually any type of contractor could benefit from this type of coverage.
Professional Liability
This is another common type of coverage that can benefit you as a contractor. This type of coverage is also known as errors and omissions coverage. It protects you against claims including legal and settlement costs. It basically protects you as a contractor from being sued by a client for either an alleged mistake or even giving perceived bad advice. A good rule of thumb to follow is this: if you provide service to a client and charge any sort of fee for your work or expertise, you should have professional liability coverage.
Workers’ Compensation
This type of coverage is required in nearly all states for the building industry. This covers the medical costs associated with an employee being hurt or getting sick on the job. Job sites present a large variety of opportunities for injury even when employees are being careful. It is just the nature of the job. Therefore, you want this coverage, even if it’s not required by your state as it will keep you protected in the event something happens to an employee on the job. Workers’ compensation can cover medical bills, missed wages, and more. It can even provide for an employee in terms of death benefits or permanent disability if a more severe accident takes place.
Commercial Auto Insurance
This type of coverage works much like your personal auto insurance, only it covers vehicles used on the job. This includes vehicles that are either owned or leased by you as a contractor. In addition, commercial auto coverage can protect vehicles against theft, crashes, and other perils that might occur while on a job site.
3. Compare Insurance Policies From Different Providers
Once you have identified your specific risks and liabilities and determined the types of coverage you need, it’s time to compare insurance policies from different providers. Look for providers who specialize in insurance for contractors and have experience in your specific trade. Don’t just focus on price, but instead also consider coverage limits, deductibles, and exclusions. As you know as a contractor, the cheapest price is sometimes cheap for a reason, you get what you pay for, so make sure any coverage you are considering is worth your investment.
4. Work With an Insurance Broker
Working with an insurance broker can help you navigate the insurance market and find the best policy to fit your needs. A broker can assess your specific risks and liabilities and help you find coverage that meets your needs and budget, all while ensuring that you are protected.
5. Review Your Insurance Coverage Regularly
Even when you find the right coverage for your business, your journey with insurance coverage doesn’t end there. In fact, your business and risks often change over time. Therefore, it’s essential to review your insurance coverage regularly and make any necessary adjustments to your coverage to ensure you remain protected against the worst that could happen.
Let Us Help
In conclusion, choosing the best insurance policy as a contractor can be a daunting task, but it’s essential to protect yourself and your business from potential risks and liabilities. At Arnold Insurance, we are here to help you navigate this process. We understand what to look for in a policy and how to help you narrow down the type of coverage that benefits you the most, all while being mindful of your budget. Call us today to get started and protect yourself and your business.