Contractors insurance is designed to cover contractors, subcontractors and business operations as related to the industry. However, it can be confusing as to who is supposed to carry contractors insurance. Does each individual contractor need insurance? Do businesses hiring contractors have to purchase contractors insurance?
As a rule, contractors should generally carry insurance for themselves and their subcontractors. It is not the duty of clients to carry contractors insurance, although they can have their own insurance protection if a mistake is made and their property is damaged.
Independent contractors, for example, should carry contractors insurance to protect themselves in case of an accident or lawsuit from a client. Contracting businesses should offer contractors insurance to cover the business itself as well as the employees.
There are several types of contractors, all of whom should consider carrying this insurance, including:
- HVAC (Heating and Air-Conditioning)
- General contractors
No matter what type of contractor you are or employee, contractors insurance can protect against claims regarding the work done.
What Does Contractors Insurance Cover?
At its most basic, contractors insurance is a form of general liability insurance. This liability insurance covers three main areas:
- Bodily Injury: Bodily injury covers medical payments a client or third party may face as a result of everyday contracting operations. If a client trips over a piece of equipment and is injured, for example, this insurance can help cover their medical bills.
- Property Damage: Property damage coverage provides compensation for property damage caused by the business’ everyday contracting operations.
- Personal and Advertising Injury: Personal and advertising injury provides compensation against claims regarding libel, slander, copyright infringement, theft of an advertising idea, malicious persecution and more.
This is not the only coverage available for contractors, however. When looking for insurance, all contractors could also consider:
- Professional Liability: Professional liability insurance covers professional negligence that may cause a client to lose money. If a contractor makes a mistake that further damages a client’s house, for example, this insurance can help cover the damages.
- Commercial Property Insurance: Commercial property insurance helps cover the physical assets owned by the contracting business such as equipment and, if applicable, offices or storage areas.
- Commercial Auto Insurance: Commercial auto insurance covers vehicles owned or used by the contractor, such as vans and trucks used to transport equipment or travel between clients.
- Umbrella Liability: Umbrella liability insurance fills in the gaps left by your other liability insurance policies.
Also Read: Coverage That Contractors Might Need