TUESDAY, DECEMBER 31, 2019
 Any business that works with customers and their homes are at high risk for liability. Mistakes, injuries and accidents can happen, so it’s important that your contracting company has the right amount of insurance so you’re not paying out of pocket for damages or lawsuits.
Contractors Insurance
Contractors insurance is an insurance policy tailored specifically for contractors. Some contractors have different needs than others, so it’s important to consider the special needs of your industry. In general, contractors should carry:
- General Liability Insurance. General liability insurance provides coverage concerning bodily injury or property damage that you, your workers or tools might cause during work. It covers both medical payments and possible lawsuits. This can also cover personal and advertising injury such as libel and slander.
- Errors and Omissions (E&O) Insurance. Unlike general liability, which provides coverage for non-negligent acts, E&O insurance provides protection in case a contractor makes a mistake due to negligence. For example, if a plumber mismatches threaded fittings and creates a fire hazard, which then catches fire and burns part of the home, the homeowner is within their rights to sue for negligence. E&O insurance steps in to pay for the damages and possible legal fees.
- Commercial Auto Insurance. Contractors travel a lot for work. If you’re driving a personal vehicle as part of work, a personal insurance policy likely won’t cover you. Commercial auto insurance provides coverage for vehicles used or owned by the company, including your workers’ vehicles.
- Pollution Liability Insurance. Certain contractors work with hazardous materials. Plumbers, heating and air, landscapers and pool installers all handle some sort of chemicals. Pollution liability provides coverage if these chemicals or materials cause environmental damage, property damage or bodily injury.
- Workers Compensation. Even if you only have one employee, you’ll likely need workers compensation. Along with being required for most businesses, workers compensation helps when an employee is injured or contracts an illness at work. This is important for contractors who handle heavy, dangerous equipment.
You can also purchase a business owners policy (BOP) which combines liability and property damage coverage into one comprehensive policy.
Are Contractors Required to Have Insurance?
In short, yes. Some industries are required by law to carry general liability coverage. Some clients may require you to provide proof of such insurance so they know any damage or injury that could arise will be handled.
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