How Does Contractor's Insurance Protect Companies and Individuals?

Are you just starting your contracting business? Perhaps you are excited about expanding your existing company. No matter what phase your business is in, having contractor's insurance is essential. It can help to protect your company from a wide range of risks. Most businesses will need to choose between several options for contractor's insurance plans. The right one will ultimately meet the risks your company is prone to, which can differ from large construction companies to small individual contractors.

What Protections Do You Need?

Perhaps the most important type of coverage for a contractor (individual or large business) is liability insurance. You are building expensive, sometimes very high-value projects. Should something go wrong, your company may have to foot the bill to rebuild the project and clean up the problem. However, general liability insurance can protect your contracting business in several ways.

• It protects your assets from loss. For example, if you are sued due to some loss, your assets could be seized to pay the settlement against your business.
  
  
• It gives your company protection to keep operating in the event that you are facing a large settlement or court costs related to a covered loss.
  
  
• It helps you to maintain your business operations even when you are faced with lawsuits. In this way, it offers security.

Beyond liability insurance, your business likely requires additional types of coverage. This may include:

• Commercial auto insurance to cover your vehicles.
  
  
• Property insurance, which covers your physical building, outbuildings, storage buildings and other types of structures. It also covers signage, equipment and inventory (such as materials).
  
  
• Builder's risk insurance helps minimize on-site risks. For example, your materials or equipment may be ruined due to a fire happening at the location of your build. This wouldn't be protected by traditional property insurance, but builder's risk insurance may cover it.

Contractors insurance should be as comprehensive as possible. Your risks may be higher than those of other businesses. Protecting your assets and your company from lawsuits ensures it can keep working to stay profitable, keeps your employees happy and aids in ensuring that, if there is a problem, your customers can get help for your mistakes.