For any contractor, having the right insurance is as important as having the right tools. You may feel that insurance is not a necessity but what would you rather do- pay a small premium to protect yourself against calamities or have to put out a large sum in one go to fix a broken machine or deal with an accident on site. Mishaps and accidents are unfortunately commonplace in the construction industry and without the right insurance, you could risk losing your entire business. Just as you have a number of different tools to perform specific tasks, there are a number of different types of contractors insurance that cover the different aspects of your work. The five most common types of insurance a contractor should have are:
General Liability Insurance
This is the most common type of insurance for contractors. General Liability Insurance can be used to cover a number of generalized incidents. This type of insurance protects you and your company in the event of any accident that damages property or injures a person. It also covers damage caused by an indirect action. However, it is important to note that this type of insurance does not cover defective work.
While some tools like a hammer or a hack saw are easy to fix or even replace, a problem with larger mechanical and electrical equipment can be quite expensive to fix or replace. Insuring yourself against the breakdown of equipment ensures that this cost does not pinch you too much and that your lost income can be compensated for. This type of insurance covers a variety of equipment including air conditioners, boilers, communication equipment and computers, refrigeration systems etc.
Business Auto Insurance
Just as you would insure your personal car, any vehicle used for commercial purposes must also be insured. Business Auto Insurance in most states is not a choice but a legal requirement. There are three aspects to this type of insurance; insurance against physical damage, liability insurance and miscellaneous details such as payments for towing and labour, auto loans, medical payments, rental reimbursements etc.
Commercial Crime Insurance
When you work on a building site, materials and equipment are often left at the construction site at the end of each day. Though you may have someone guard your assets, you still face the risk of theft and other such crimes. Hence, it is highly beneficial to have a Commercial crime insurance policy in place. This can be customized to your need and covers many different types of crimes such as theft and forgeries.
When you employ someone not only are you liable to pay him wages for the work done but in the case of an accident on site, you are also liable to pay for his medical expenses and reimburse lost wages. Hence Worker’s compensation coverage is a must for every firm that employs part time or full time employees. Though the statutes vary from state to state, this is a legal requirement across America.