Running a contracting business comes with a lot of insurance risk. Whether you’re a general contractor, plumber, electrician, or carpenter, having the right insurance is important to protecting your business, your employees, and your clients. In this post, we’ll cover the types of insurance coverage every contractor should have and explain why each one is important.
1. General Liability Insurance
General Liability Insurance is one of the most important types of coverage for contractors. It protects you from claims of property damage or bodily injury caused by your work. For example, if a client’s property is damaged during a renovation or a passerby gets injured at your job site, this policy covers the legal and medical expenses.
Why You Need It:
Accidents happen, and when they do, the costs can be devastating. Without General Liability Insurance, you could be paying for the damage that you caused out of pocket, face lawsuits and claims that could put your business at risk. This coverage offers peace of mind and protects your financial stability.
2. Workers’ Compensation Insurance
If you have employees, you’re required by law in most states to carry Workers’ Compensation Insurance. This policy covers medical expenses and lost wages if one of your employees is injured on the job. Given the physical nature of contracting work, accidents can happen at any time.
Why You Need It:
Workers’ Compensation ensures that your employees are taken care of if they’re injured while working. It also protects your business from potential lawsuits stemming from workplace injuries, which could lead to costly legal battles.
3. Commercial Auto Insurance
If your contracting business uses vehicles, Commercial Auto Insurance is a must. It covers your work trucks, vans, and other vehicles used for business purposes. This coverage protects you from liability if one of your vehicles is involved in an accident.
Why You Need It:
Personal auto insurance typically won’t cover vehicles used for business purposes. Commercial Auto Insurance ensures that your business is protected from damages, injuries, or lawsuits resulting from vehicle accidents.
4. Tools and Equipment Insurance
Tools and equipment are the lifeblood of any contracting business. Tools and Equipment Insurance covers the cost of replacing or repairing your tools if they’re stolen, damaged, or lost.
Why You Need It:
Replacing expensive tools and machinery can be a major financial hit. This coverage ensures that you can keep working without the worry of having to pay out of pocket to replace equipment that you rely on in your business.
5. Professional Liability Insurance (Errors & Omissions Insurance)
While General Liability Insurance covers physical injuries and damages, Professional Liability Insurance (also known as Errors & Omissions Insurance) covers mistakes, oversights, or negligence in your professional services. If a client claims that your work caused financial harm, this coverage steps in.
Why You Need It:
Even the most experienced contractors can make mistakes. Professional Liability Insurance protects your business from lawsuits related to errors, omissions, or faulty work, helping to cover legal fees and settlements.
6. Commercial Property Insurance
If you own or lease office space, a workshop, or storage facilities, Commercial Property Insurance protects your property and its contents from damage caused by fire, theft, or other disasters.
Why You Need It:
Your office, tools, and materials are essential to your business operations. Commercial Property Insurance ensures that your physical assets are covered in case of damage or loss.
Final Thoughts
Contractors face unique risks every day, and having the right insurance coverage is essential to protecting your livelihood. From General Liability to Workers’ Compensation and Tools Insurance, each type of coverage plays an important role in shielding your business from the unexpected.
At Ameriguard Insurance, we understand the challenges contractors face, and we’re here to help you find the right coverage to keep your business safe. Contact us today to learn more about Contractors Insurance and how we can help you stay protected.