Must-have Insurance Coverage for Contractors

Contractors face unique risks every day, from workplace accidents to property damage and legal disputes. Contractors need a solid insurance plan to protect their business, assets and employees. The following are the must-have coverages every contractor should consider:

1. General Liability Insurance

General liability insurance is essential for contractors. It may cover third-party bodily injury, property damage and personal injury claims. For instance, if a client trips over a tool and gets injured on a job site, this policy could help cover medical costs and legal fees. Many clients and project owners require contractors to have this coverage before work begins.

2. Workers’ Compensation Insurance

Most states require contractors with employees to carry workers’ compensation insurance. This coverage may pay for medical expenses, lost wages and rehabilitation costs if an employee is injured on the job. Even independent contractors should consider workers’ comp to protect themselves in case of injury, as personal health insurance may not cover work-related accidents.

3. Commercial Auto Insurance

Contractors often rely on vehicles to transport tools, equipment and materials. Personal auto policies typically exclude business-related incidents, so a commercial auto policy is necessary. This coverage may help pay for damages, medical bills and liability if a work vehicle is involved in an accident.

4. Contractors Equipment Insurance

Tools and heavy equipment are major investments. If they’re stolen, damaged or destroyed, contractors equipment insurance may help cover repair or replacement costs. This coverage can be particularly useful for those who frequently move equipment among jobsites.

5. Professional Liability Insurance

Mistakes in design, planning or workmanship can lead to costly claims. Professional liability insurance, also called errors and omissions (E&O) insurance, may cover legal expenses if a client sues for alleged negligence or mistakes that cause financial harm.

6. Builders Risk Insurance

Construction projects are vulnerable to risks like fire, theft and weather damage. Builders risk insurance provides coverage for buildings under construction, as well as materials and equipment on-site. Lenders and project owners often require this policy.

By securing these essential coverages, contractors can safeguard their business from financial setbacks and legal disputes. Contact Leon Insurance and Tax Services to learn more.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.