What Insurance Coverage Do Contractors Need?


Jun 29, 2020

Find out what insurance coverages your contracting business needs.

If you provide a contracted service to someone else, then chances are you need Contractors Insurance. Having the right insurance coverages does more than just protect your business from financial loss; it also gives your customer peace of mind that their trusted contractor is protected and insured.

Who Needs Contractors Insurance Coverage?

Commercial contractors include but are not limited to:

  • General contractors,

  • Roofers,

  • Landscapers

  • And more.

If you are contracted to do trade-related work for someone, you should definitely consider getting these coverages.

What Insurance Coverages Do Contractors Usually Need?

Commercial General Liability (CGL)

Commercial General Liability Insurance can provide protection against

  • Bodily Injury,

  • Property Damage,

  • Personal and Advertising Injury,

  • Medical Payments,

  • Tenants Legal Liability

  • And in some cases can include Employers Liability and Non-Owned Automobile Liability coverages.

Having CGL Insurance covers defense and damages against a lawsuit if your products or services cause or are alleged to have caused bodily injury or property damage to others.

Commercial Property Insurance (Equipment and Tools Coverage)

Commercial Property Insurance covers your business’s physical assets against loss or damage from a broad range of causes - such as (but not limited to) fire, hurricane, water damage and vandalism.

Builder's Risk (Course of Construction)

For residential contractors, you may also need a Builder’s Risk Insurance policy. Builder’s Risk Insurance, or Course of Construction, is a distinctive kind of property insurance. It is used to insure buildings or areas that are going through construction or renovation for the duration of the project. It can be provided by either the contractor or the property owner. It covers damages done to the property owner, not the contractor. It does not cover damages resulting from poor workmanship.

Professional liability Insurance

Professional Liability Insurance or E&O Insurance protects you and your business from claims related to negligence, misconduct, product failure or failure to provide the expected level of service.

Cyber Insurance

Cyber insurance protects you against lawsuits or claims arising due to cyber-related incidents such as system breaches and hacks.

Here Are Examples of When Insurance Can Help Protect Contractors:

You are painting the walls for a client and accidentally cause damage to their carpet flooring. Your CGL policy may cover the cost to repair or replace the flooring you damaged.

There is a fire at the warehouse where you store your tools and equipment. Your Property Insurance can cover the cost to replace the damaged property.

There is a fire at a construction site where you are building a home for a client. Builder's Risk Insurance can cover damage to your client's property on the site.

Other Frequently Asked Questions:

How much does Contractors Insurance cost?

The cost of contractor’s insurance varies greatly from business to business. Factors such as years of experience, field of work, annual revenue, number of employees, and previous claims can all affect the premium you can anticipate to pay. It is important to review your insurance policy with a trusted insurance professional to make sure you are adequately covered.

What are some extensions of coverages you should consider?

  • Property in transit

  • Scaffolding

  • Property in temporary storage

  • Fire department service charge

  • Debris removal

  • Sewer and drain backup

  • Valuable papers (site plans, blueprints, etc)

Every business and situation is different - especially with all the different types of contracted work. That's why, it's important to speak to a broker to help examine your scenario and assess your specific insurance needs as a Contractor. At Foxquilt, we can help provide you smarter business insurance customized to fit your needs. By joining our Foxquilt community of Contractors, you can receive better buying power and even unlock group savings on your insurance premiums. Get started on a quote for insurance built for your business.

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