Do Contractors Need Business Insurance?

Absolutely. Yes. 100%. No doubt about it. If that doesn't answer your question, maybe another question or two will? Do you want to pay out of pocket claims against you? Do you want to be alone in defending yourself against a lawsuit? Of course the answer is no to both. You don't want to be alone against the legal system if you don't have to be. When you have business insurance you have a partner in liability, you have a partner fighting and settling claims made against you, and as long as the price is right, you want to make sure you never have to cancel business insurance as well.

As a contractor you have important work to do. You are the person that can make a home safe for a family. You might be responsible for getting a project done on a tight deadline. In whatever situation there is, you need to have business insurance in place to protect you against the risks of doing business. Business insurance is the most affordable way to manage your risk. You can start off small and grow your insurance portfolio as your business grows.

Types of Insurance

There are many types of insurance that a contractor should consider. Some might not fit your needs currently. For instance, if you are running your business from your home, having separate property insurance might not make sense. You should contact your homeowners insurance provider for guidance on this issue.

Liability coverages is basic business insurance that covers you against claims of liability arising from the negligence of you or your employees. Even if there is no negligence, fighting a claim can be costly and you need the guidance of an experienced insurance provider to help you fight in these situations. You can also look into Business Interruption insurance. If you are a contractor that uses large, expensive equipment to get your work done, this coverage is there in case you are not able to do your job because this equipment malfunctions. This would cover your losses over that period of time until you could get working again.

Commercial auto coverage is available for contractors who use their vehicle for business purposes. Many have the mistaken belief that they are covered by personal auto. You must be clear with your insurance provider on the way you will use your vehicle. It can greatly affect your rates and your provider will decide at what point you would need a separate commercial policy versus your personal auto coverage.

Costs of Business

As a contractor you are not free from the costs of business that an average company might have. You might not have a building or office to protect but you are still exposed to most of the same risks as any other business. You have the possibility of a claim made by a customer concerning work that you or one of your employees did. A customer could come back and say that your negligence led to hefty damages. This is enough to start the process of a lawsuit. If you are not insured you will have to obtain legal representation and you could be responsible for a costly damage judgment against you.

When you are covered by business insurance that protects you in the event of a liability claim you get the guiding, experienced hand of an insurance provider and their legal team behind you. They are going to assess each claim for responsibility and fight for you and themselves if you are not at fault. Contractors need business insurance so they can face any claim and handle it without putting their financial lives at serious risk.

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