Being an insurance agent specializing in contractors insurance for ten plus year now, I've heard all the questions and excuses why Contractors don't need insurance. Being that I come from a family of contractors makes things even worse. Trust me, I've heard it all, from, "Why do I need contractors liability insurance, I haven't had a claim in thirty years?" to, "Workers Compensation Insurance? I only hire day labor and they don't need to be covered". Over the years I've fielded these questions and proclamations what seems to be a thousand times. It wasn't until sitting around a campfire hearing horror stories from my extended family, all of whom are roofers, I decided that I needed to write something about the subject. Hoping that at least one contractor will read this and therefore come to their senses and purchase contractors insurance, thus securing their future. Here I break down the different types of insurance that I feel are the most commonly used for contractors and why they are needed.
Contractors liability insurance. This is the one insurance that contractors use the most. They are always breaking things since they work with large and heavy objects and are large and heavy people themselves. Sometimes when things get done wrong or they break little things they tend to pay for it themselves. But what about when major damage occurs? What contractor would pass up paying $1,000 to save on paying $120,000. None, that's who.
Work compensation insurance. This one will cause major claims and so many contractors talk themselves out of buying it for some crazy reason. Contractors work in the most dangerous conditions and chances are, that eventually someone will get hurt. Safety meetings and precautions aside, a contractor will get hurt at some point. Even after five or ten years of no losses, someone will have a board land on their head and that's it for their career. If there's no work comp insurance in place then the owner of the company is liable to pay. Almost all states have some sort of workers compensation insurance law in place which makes it even more necessary. Who pays for the cost of medical attention and for retraining the employee? Work comp is necessary for your employees and that means day labor too.
Tool Coverage. This is the one coverage that usually always is overlooked. Contractors tool insurance can cover a wide range of property from small miscellaneous hand tools to large pieces of equipment left at jobsites. I hate those calls that I get from my clients who may have only wanted contractors liability insurance quotes but declined to add the contractors tools coverage to their policies and now have $5,000 worth of tools stolen out of the back of their work truck. It pains me to let them know that they have no coverage. Contractors tool insurance policies are usually something that has to be added on specifically or purchased as a stand alone policy. This usually ends up being forgotten or dismissed altogether, until needed that is.
Commercial Auto Insurance. Don't forget about your trucks. Most personal lines auto insurance companies exclude any claims as a result of commercial operations. Further to this, the coverage options are usually different as well. Hired and Non-Owned coverage is particularly important for those contractors who allow their employees to use their own vehicles for the purposes of the businesses operations and many personal auto insurance companies do not offer this coverage. Many contractors feel that one auto insurance policy is the same as the next, but after filing a claim, the difference is quickly known.
Contractors just need insurance, period. What they do is risky in nature. Their prices for insurance are higher since they are a riskier bunch. Their prices are higher since they have more claims. More claims means that they need the insurance more than other businesses do. It's hard to feel comfortable if at anytime one claim could take everything I worked for away. Looking around and tallying up everything you are worth helps to make the decision to buy insurance. I think after seeing all your worth purchasing insurance is a good idea.
Contractors liability insurance. This is the one insurance that contractors use the most. They are always breaking things since they work with large and heavy objects and are large and heavy people themselves. Sometimes when things get done wrong or they break little things they tend to pay for it themselves. But what about when major damage occurs? What contractor would pass up paying $1,000 to save on paying $120,000. None, that's who.
Work compensation insurance. This one will cause major claims and so many contractors talk themselves out of buying it for some crazy reason. Contractors work in the most dangerous conditions and chances are, that eventually someone will get hurt. Safety meetings and precautions aside, a contractor will get hurt at some point. Even after five or ten years of no losses, someone will have a board land on their head and that's it for their career. If there's no work comp insurance in place then the owner of the company is liable to pay. Almost all states have some sort of workers compensation insurance law in place which makes it even more necessary. Who pays for the cost of medical attention and for retraining the employee? Work comp is necessary for your employees and that means day labor too.
Tool Coverage. This is the one coverage that usually always is overlooked. Contractors tool insurance can cover a wide range of property from small miscellaneous hand tools to large pieces of equipment left at jobsites. I hate those calls that I get from my clients who may have only wanted contractors liability insurance quotes but declined to add the contractors tools coverage to their policies and now have $5,000 worth of tools stolen out of the back of their work truck. It pains me to let them know that they have no coverage. Contractors tool insurance policies are usually something that has to be added on specifically or purchased as a stand alone policy. This usually ends up being forgotten or dismissed altogether, until needed that is.
Commercial Auto Insurance. Don't forget about your trucks. Most personal lines auto insurance companies exclude any claims as a result of commercial operations. Further to this, the coverage options are usually different as well. Hired and Non-Owned coverage is particularly important for those contractors who allow their employees to use their own vehicles for the purposes of the businesses operations and many personal auto insurance companies do not offer this coverage. Many contractors feel that one auto insurance policy is the same as the next, but after filing a claim, the difference is quickly known.
Contractors just need insurance, period. What they do is risky in nature. Their prices for insurance are higher since they are a riskier bunch. Their prices are higher since they have more claims. More claims means that they need the insurance more than other businesses do. It's hard to feel comfortable if at anytime one claim could take everything I worked for away. Looking around and tallying up everything you are worth helps to make the decision to buy insurance. I think after seeing all your worth purchasing insurance is a good idea.
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