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How To Choose The Right Contractor Insurance

 
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Old 08-10-2020, 09:42 AM   #1
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How To Choose The Right Contractor Insurance


How to Choose the Right Contractor Insurance

Whether you are a General Contractor who employs a sizable workforce or a single-person operation, you face the risk of being sued. Facing a lawsuit or a big claim can drain your financial resources or even ruin your business. Whatever the size of your business, as a building contractor, insurance is one of those investments that you have to make.

Contractor Insurance is a custom item

However, requirements differ from state to state and across the profession too. Before you purchase your insurance, review your risks. What coverage do you need? This knowledge will guide your insurance consultant to tailor an insurance program to cover these risks. You won’t pay for for risk coverage that your business does not need.

Asking yourself these questions is a good place to start:
What is the nature and extent of work you do?
What is the size of your operations?
What typical projects do you take up?
What is the size of your workforce?
The insurance package you purchase must give you the best coverage that you can afford. Working with a knowledgeable insurance partner is the best way forward.

Which policy is best for your business?

Now that you know what risks you need covering, it is time to find an insurance policy that does just that. The bad news is that there is no single policy that covers all contractor risks.
For example, General Liability is coverage for third-party claims. So, your liability insurance gives protection when your client, a visitor to the site or a neighbor, brings a claim against you. It can be for injury to their person or damage to their property.

Another example is Auto Insurance. Neither your General Liability nor your personal auto insurance will protect you if your work vehicle is in a crash. You require commercial Auto Insurance even if your personal vehicle is used for work.
Attention to detail

When selecting an insurance policy, the price shouldn’t be the only deciding factor. It is wise to consider payouts, coverage, limits, as well as your insurance company’s attitude to customer service and professional ethics.
  • Risk varies from business to business across the construction industry, but here are some tips that apply to everyone.

  • Risk exposure: The construction industry is high risk. As a result, the premium rates may be higher than for small businesses in other sectors. However, you can reduce your policy costs by minimizing on-site risk exposure as much as possible. Do this by complying with construction safety rules and regulations. Ensure that all who work for you follow the same.

  • Business location: If you work in areas that are prone to natural disasters or political instability, could result in a higher rate of premium.

  • Experience: Your own experience and the age of your business can have an impact on the insurance cost.

  • Policy details: The elements that make up your policy (such as coverage limits and deductibles) are other aspects of customization that can impact the purchase rate.
Find out more

For more information about contractor coverage, call Farmer Brown Insurance company on (888) 973-0016.
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