Accidents can happen, and if you’re not properly insured, you could be held liable for damages. Contractor’s insurance is insurance that covers contractors while they are working on a job. It can help protect them from accidents, injuries, and property damage.
Here are the important things you should know about a contractor’s insurance before deciding whether or not to purchase it.
Type of Projects
To be protected by contractor’s insurance, the project you’re working on must meet certain criteria. The job site must be in the same state as the contractor, and the work being performed must fall under the category of “contractor.” According to APOLLO Insurance, some examples of typical contractor work include renovations, home repairs, plumbing, and electrical work. If you’re unsure whether or not your work qualifies, it’s best to err on the side of caution and purchase insurance.
On the other hand, if you’re working on a project for your own home, you likely don’t need contractor’s insurance. This is because your homeowner’s insurance will usually cover any damages that occur as a result of your work.
Contractor’s insurance typically covers four main areas: liability, workers’ compensation, automobile, and surety bonds.
Liability coverage protects you if someone is injured or their property is damaged as a result of your work. For example, if you’re working on a roofing project and a piece of debris falls and injures a bystander, liability coverage would help pay for their medical expenses.
Workers’ compensation insurance covers employees who are injured while working on a job. This type of insurance is typically required by law, and it can help protect you from being sued if an employee is injured while working for you.
Automobile insurance covers damage to vehicles that are owned by the contractor. This includes both work-related vehicles (such as trucks and vans) and personal vehicles that are used for work.
Surety bonds are a type of insurance that protects the customer if the contractor does not complete the job or performs it in a subpar manner. If you’re working on a large project, the customer may require you to purchase a surety bond to protect themselves from financial loss.
Do You Need It?
As a general rule, you do not need contractor’s insurance unless you are working on a job for someone else. However, there are some exceptions to this rule. For example, if you’re working on a project that is required by law to be insured (such as a roofing project), you’ll need to purchase insurance to comply with the law. Additionally, some customers may require you to purchase insurance to work on their property.
Additionally, there are some types of projects where insurance is strongly recommended, even if it’s not required. For example, if you’re working on a project that involves hazardous materials (such as asbestos), it’s important to have insurance in case of an accident.
The cost of a contractor’s insurance will vary depending on the type of work you do, the location of the job site, and the amount of coverage you need.
Contractors’ insurance is important for anyone who is working on a job site. It can help protect you from accidents, injuries, and property damage. Make sure to read over the four points we covered to see if the contractor’s insurance is right for you. Keep in mind that there are some exceptions to this rule, so it’s always best to check with your insurance company or the customer before starting a job.