3 Things Contractors Should Know About Contractors Insurance

Contractors insurance is specially designed to protect contractors from some of the risks that they face. If you run a contracting business, here are three things you should know about contracting insurance.

1. Contractors Insurance Protects Against Multiple Risks

Contracting work comes with a variety of inherent risks; people can be injured, mistakes can be made, equipment can be stolen, and other bad things can happen. Contractors insurance helps protect against many of these risks by offering a variety of coverage options, such as:

  • Workers' compensation coverage, which guards against employee injuries
  • General liability coverage, which guards against common third-party injuries
  • Professional liability coverage, which guards against errors
  • Commercial property coverage, which guards against theft from company locations
  • Builders' risk coverage, which guards against theft from worksite locations

There are still more coverage options that contractors might need, including commercial auto coverage, inland marine coverage, and others.

With so many coverage options, you can find a contractors insurance policy that'll provide the protections your contracting business needs.

2. Some Customers Require Contractors to Have Insurance

Without insurance, certain jobs may be off-limits to your contracting business. While some customers will hire a contractor who's uninsured, many won't — and the customers who won't hire an uninsured contractor tend to be commercial customers who have larger projects.

Customers who only hire insured contractors do so in order to protect themselves. When a contractor doesn't have insurance, the customer who hires them might be sued if there's an accident. When a contractor does have insurance, the customer is much less likely to be sued in this type of situation.

3. Contractors Should Carry Certificates of Insurance

In order to prove to customers that insurance is in place, each salesperson in your business should carry a certificate of insurance. This is a document that's furnished when your policy is underwritten, and additional copies can be requested from your insurance company. The certificate serves as proof that your business is insured.

A certificate of insurance is the document you'll need to prove to customers who ask that your business is insured. Even if a customer doesn't ask to see the certificate, showing them can help establish your business as a professional organization and set it apart from less-established competitors.

Of course, the certificates of insurance that you show customers should always be current. Every time you get a new contractors insurance policy, your salespeople will need new certificates of insurance.

Contact an insurance agency that offers contractor insurance policies to learn more.

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