Contractors Insurance

Contractors Insurance

Contractors insurance is designed for contractors, such as painters, plumbers, electricians, and handymen, who agree to complete construction projects based on contracts. It covers professionals who are not employed by a company, so they set their work conditions, hours and salaries. Some contractors earn more than if they worked as employees; however, they cannot receive sick days, vacation days or health benefits. This is a major disadvantage to professionals who are engaged in dangerous, laborious work. Contractors insurance is provided to cover the expenses of work-related injuries, property damages, and medical bills.

How It Works

Contractors’ insurance is usually sold separately. The contractors decide if they need additional coverage in commercial property, automobile or liability insurance. Bundled insurance is provided at a discount.

Many contractors are required to have liability coverage at a basic level. Liability insurance covers the costs of medical expenses, property damages, false advertising claims, and product liability. In most cases, contracting professionals are required to pay for the damages if an accident occurs on their property or they cause one at another location. They can even be sued for making negative comments about another business. Even if liability coverage is not required, contractors look more responsible when they’re insured and increase their chances of winning contracts.

In several states, worker’s compensation insurance is required from contractors. This option is available to those who own businesses and have employees. The insurance protects them from having to pay out of pocket to cover their employees’ accidents and illnesses.

Contractors have different types of business insurance to choose from. A business owner’s policy (BOP) is designed for a business owner who runs a company full of contractors. It includes general liability and property insurance bundled into one package. This bundled policy is discounted and less expensive than the purchase of separate policies.