Being a contractor can be rewarding in many aspects. However, as everyone knows, the field of construction poses consistent dangers and general risks physically and financially. Work may be completed inadequately by your employees, workers may get injured on the job, a work vehicle might be involved in a car accident, the list goes on.
For that reason, contractors are typically required to have certain types of insurance due to the risks their field poses. Some of the types of insurance relevant for contractors include:
1. Professional liability insurance
Professional liability insurance or errors and omissions insurance protects both the construction company and their employees from claims made against them for faulty work, negligent actions, or unintentional errors on the job. Improper work can, after all, result in bodily injury or property damage, which are certainly things one might consider suing your company for.
While Liability Coverage is not always required, it’s beneficial, especially for contractors. Because, chances are, you won’t be present to monitor your employees around the clock, liability insurance can ensure that when things go wrong without your supervision, your company’s profitability won’t be in shambles when and if repairs or project redos are required.
2. Workers’ compensation
According to the Bureau of Labor Statistics, construction laborers have the top third risk of suffering from a fatality on the job. Fatalities among construction workers are most common due to falls and vehicle accidents on the job.
With workers’ compensation insurance, you are held liable for the lost wages and medical bills of your employees who suffered from an injury that occurred at work. While this may seem like a loss for you, workers’ compensation can help avoid messy lawsuits from employees. It means your workers can get the medical attention they require to quickly heal and get back to work.
3. Commercial auto
A contractor’s vehicles should always be covered via commercial auto insurance. Even with the best drivers, there is never a guarantee that one of your work vehicles won’t be involved in a vehicle accident or other situation where damage may occur. With the amount of driving the field of construction entails, there’s a good chance you’ll make use of your auto insurance.
However, apart from general commercial auto insurance, there are coverage extensions that may be relevant for contractors. These extensions include Amended Fellow Employee Exclusion, Hired, Leased, Rented or Borrowed Auto Physical Damage, Employees as Insureds, among others.
Before deciding what types of contractor insurance(s) you require, it’s important to consider your business’ needs as well as local and state requirements for types of insurance you must hold. Additionally, it is important to consider construction insurance cost before opting for any type of insurance.
Conclusion
Because construction is a field where safety is a big concern, it’s vital that contractors opt for the best types of insurance possible. Some of the most important types of insurance contractors and/or their employees benefit from include professional liability insurance, workers’ compensation insurance, and commercial auto insurance.
As a contractor, it matters to not only consider the types of insurance that matter most but also select the best policies most relevant for your company. The types of levels of insurance one contractor may need may vary from one to the next.
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