Contractors Insurance & Home Builders Insurance
Contractors insurance? OK. You’re a contractor or you wouldn’t be visiting here. Whether a seasoned builder, independent contractor or start-up, you’re in the right place to find all that you need to reduce your risk exposures, limit losses, cut costs and improve your cash flow.
Large or small, we serve home builders and trade contractors in Central Virginia. You are guaranteed the professional attention of a local, independently owned insurance agency. That means access to a vast array of insurance companies to match your unique needs. Together, we’ll analyze your requirements and match solutions that work for you.
You may fit one or another of the following contractor profiles:
- Independent Construction Contractors
- Repair Contractors
- House and Carpet Cleaners
General Contractors and Home Builders
- Concrete & Foundations
- Mechanical & Plumbing
- HVAC / Sheet Metal
- Municipal / Utilities
- Painting & Industrial Coatings
- Steel Fabrication / Erection
- Street & Road / Bridge
- Excavcating & Grading
- Waterproofing & Restoration
- Carpentry / Roofing
- Environmental / Demolition
Business Insurance For Contractors
To save you time, you’ll quickly find what you need to enjoy peace of mind that you have adequate insurance protection. Of course, the types of insurance right for your business will vary greatly and depend on your industry, the size of your business, and the type of clients you work with, among other factors.
Here are the most common types of business insurance that many contractors carry:
- General Liability
- Commercial Auto
- Equipment & Tools
- Business Property
- Workers Compensation
- Bodily Injury & Property Damage (included in General liability?)
- Errors & Omissions (Professional Liability)
- Business Income
- Surety Bonds: License, Performance, Bid, Payment
- Builders Risk
Be sure to read on to learn about what you should consider for your unique business. We understand the essentials for contractor risk management and will help you meet your insurance needs.
General Liability Insurance … The Critical Foundation … The 3 ‘P’s
General liability insurance is critical for contractors to adopt. The key reasons are best remembered as the 3 ‘P’s:
This insurance covers a wide range of incidents, including accidental damage to a client’s property, claims of libel or slander, and the cost of defending lawsuits.
Showing proof of this coverage adds to your professionalism when dealing with clients.
The law may require it. Additionally, savvy clients will demand that you have this insurance in place before you may be allowed to submit a bid.
General Liability Insurance reimburses for legal costs stemming from third-party lawsuits over bodily injury, property damage and completed operations. Some examples of incidents that can happen on the job:
A customer trips on a piece of equipment while you are working onsite and sues you for negligence.
Damage is sustained by flooring or other structures at the work-site by you or your workers.
Libel, Slander, & Defamation
Another contractor sues you for any of these 3 forms of character assassination.
Knowing that your business is covered helps build trust among clients, partners and suppliers. Your payoff is to win contracts and attract more customers.
Financially, insurance helps protect you from claims, fines and lawsuits of all sorts. Besides protecting your assets, this gives you peace of mind. Simply put, with the right coverage in place, you can focus on the parts of business you do best, and better build your contractor business.
Other Types Of Contractors Insurance
OK. You know that General Liability insurance is the place to start. That said, depending on the type of business you operate, your size and the clients you serve, you may want to consider your potential exposure to risk that may be lessened by one or more of the following contractors insurance coverages.
Business Property Insurance
Consider property insurance to protect the value of your physical workspace. This makes sense whether you own your facilities, rent space or even conduct business from your home.
Disability insurance will replace a portion of your income should you become disabled and are no longer able to work. Independent contractors should consider the purchase of an individual policy. Contractors with employees often provide a group plan.
Bodily Injury & Property Damage Insurance
Does your work as a contractor include heavy machinery and tools, e.g. plumbers, re-modelers and electricians? Then you need to be concerned with mishaps due to hazards such as power tools, defective machinery and compressed gas. That’s where this form of insurance comes into play.
Builders Risk Insurance
Builders risk insurance provides temporary financial protection for building projects while they are under construction or renovation. Coverage for builders insurance may include materials, fixtures, equipment, and the structure itself in the event those items are damaged or destroyed by a covered risk, such as fire, theft, vandalism or extreme weather.
Equipment & Tools Insurance
Your work as a contractor requires you to have some pretty expensive equipment … that may range from an electric table saw, your office computer and much more imposing items depending on your specialty. Good equipment and tools insurance is a safeguard against:
- The cost of replacement for equipment that is stolen.
- Repairs for damaged tools.
- Rental fees for tools and equipment while you’re waiting for a replacement.
Errors & Omissions Insurance
This form covers legal costs from negligence claims. Sometimes called professional liability insurance, it protects against lawsuits alleging mistakes made by you and your employees ... and pays for your defense should a client claim a financial loss due to your professional negligence. E&O insurance is especially important for contractors who design and build projects as designing projects increases your risk of being sued for negligence.
Business Income Insurance
Your construction business may obtain business income insurance to provide coverage for direct losses sustained to the business property as well as for indirect losses sustained as a result of suspending operations. The purpose of this insurance is to reimburse you, the insured, to be in the same financial position had there been no interruption in your business activities. “Business income” means the net income, net profit, or net loss before income taxes that would have been earned or incurred plus continuing normal operating expenses.
Commercial Auto Insurance
Commercial auto insurance is a necessity if your contractor business owns vehicles. This coverage is to protect you and your workers when driving on the job. Much like personal auto insurance, commercial auto has liability coverage to pay for other people’s damage and injuries when you’re responsible. You can also get coverage for your vehicle’s damage, your medical bills, and accidents with uninsured motorists.
Most states require at least liability coverage for your business vehicles. Even if you have personal auto insurance, you may need commercial auto insurance. Insurers usually exclude business driving from their policies.
Workers Compensation Insurance
Whether you are an independent contractor or seasoned contractor with employees, you need to look into your need for Workers’ Compensation Insurance. In the state of Virginia, employers with 2 or more employees are required to provide workers compensation insurance. Also known as workmans’ comp insurance, it provides benefits to employees for work-related injuries or illnesses including medical care, wages from lost work time, and more. Workers’ compensation insurance covers a deceased worker’s family with a financial benefit as well. If a worker’s family decides to sue your company, it can also help cover the related legal fees.
Some examples of protection for your business and employees in events such as these:
- Your employee slips on the job, is injured and requires an emergency room visit and weeks of recovery time.
- Your employee is injured in a job-related function and requires a doctor’s attention, medication and physical therapy.
- Your employee driving back to the office returning from a customer’s worksite is injured in a car accident and requires hospitalization.
Surety bonds are more like insurance for your clients than for you. They act as a guarantee that you will complete their project as your contract states. If you fail to deliver on your contract, your insurer reimburses your client. Typically, your insurer expects repayment for claims.
There are four types of surety bonds contractors usually need:
- Contractor License Bond – These bonds are required by law at the state, city, or county law level. Without a license bond, a contractor cannot get licensed and can face a fine if they try to work in the area.
- Bid Bonds –Bid bonds stop contractors from submitting unrealistic bids. They guarantee compensation for the project owner if you fail to honor your proposal. Not all projects require bid bonds.
- Payment bonds – These bonds guarantee payments for your subcontractors and suppliers and protect project owners from having to cover these costs if you can’t. A federal law requires contractors to get payment bonds before they be awarded a contract that exceeds $100,000.
- Performance bonds – Performance bonds guarantee the project will be completed as outlined in the contract. If the project takes too long or fails to meet quality standards, the project owner can make a claim on the performance bond.
- Government entities usually require contractor-specific surety bonds, but anticipate that prospective clients may ask if you’re bonded and insured as well.