Brooks, Todd & McNeil Agency Blog

What You Need to Know About Contractors Insurance

Contractors insurance refers to a wide range of insurance products designed for general contractors, specialty contractors, homebuilders, remodelers, carpenters and other types of construction businesses. For these businesses, contractors insurance helps to minimize the risks they face from employee injuries, equipment and materials damage, motor vehicle accidents and more. These losses can be in the form of property damage, loss of income, employee injury, illness or death, and liability claims. Because contractors and construction companies-and the types of work they perform-are so diverse, not every type of contractor or construction firm needs the same type of insurance. Your business insurance needs will be based on the size of your company, the number of employees you have and the type of work you do.

Most contractors must at least consider the following types of basic contractors insurance policies, which can be tailored to their needs:

  • General liability insurance protects your business if it is responsible for bodily injury or property damage. Most construction companies need commercial general liability insurance in order to obtain a contractor’s license, essentially making this type of coverage mandatory.
  • Builders risk insurance covers your business if you sustain damage to your business property at a construction site.
  • Professional liability insurance provides coverage if a client has a financial loss that is based upon any professional advice or services that your firm provided. If your firm provides design services or consultation, you likely need professional liability coverage.
  • Loss of income/business interruption insurance provides income replacement protection in the event that you cannot operate due to a covered business interruption.
  • Workers’ compensation insurance covers medical and certain other expenses (loss of income, death benefits) for employees who experience a job-related illness or injury.
  • Commercial auto insurance provides liability and property damage coverage for any vehicles owned by your business or used for business purposes.

Most contractors will also need a variety of contractors bonds, or surety bonds. Contractors bonds are essential to finding, securing and performing work for many types of construction projects. Surety bonds are usually required by a project owner in order for your bid to be accepted, and typically they guarantee some aspect of the bidding process and the contract. You may be asked to secure and provide bid bonds, performance bonds, payment bonds, license and permit bonds, and maintenance bonds in order to secure all kinds of contracts. And surety bonds are required for any federal construction contract valued at $150,000 or more.

We can help you find and secure business insurance programs and surety bonds to make sure you and your customers are protected in all kinds of situations. Our experienced business insurance professionals can help you understand your options and find the right solutions for your needs. Want to learn more?

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