Are you shopping for contractor insurance? These policies and levels of coverage vary across insurers, meaning you should be attentive when choosing the best one.
The aim of contractor insurance is to protect your employees, equipment, clients, and yourself from paying hefty costs caused by accidents, equipment damage, auto damage, etc. Choosing the best insurance policy should be done by asking yourself a couple of questions related to its terms and legal requirements.
These are the top three questions to ask before investing in or purchasing contractor insurance today.
1. Does it cover damages?
The first question to ask before purchasing contractor insurance is whether the policy covers damages. Accidents are bound to happen even to the most cautious professionals.
Even though general liability isn’t a requirement imposed by most state laws, it is still a smart choice for any business. In case any of your employees cause accidental damage to customer property while performing their job, you will be held liable for all legal damages and fees incurred by the incident.
General liability coverage, on the other hand, is intended to cover repair and legal defence costs for damages caused by a third party. Even if no accident occurs, your business stands to gain from such coverage by demonstrating your professionalism to potential clients. When clients learn that your company is covered, there is a better chance for them to put their trust in your hands.
Moreover, proof of insurance is a sign that you are looking out for the needs of clients and your own needs. Make sure you visit this website to understand the insurance needs of California contractors. Customers also wish to see proof of license, as it further proves contractors’ reliability and reputation. A license is earned from the state board by passing an exam and then taking continuing credits every year.
Being licensed shows that you keep up with the changes in code and the best practices in the industry. Since trends change quickly, it is important to have continuous education during the entire time you are in business. Also, your license should be applicable to the types of projects requested by clients.
2. Do you need workers’ compensation if working alone?
Another question to ask before purchasing contractor insurance is whether you need workers’ compensation if working alone. In some states, workers’ compensation insurance is mandatory. For example, California law obliges all employers to carry such insurance even if they don’t have more than one employee.
The only way for California contractors to obtain or reactivate their licenses is by providing a valid certificate of workers’ compensation coverage. Even if you work alone, you might still be required to provide such a certificate.
The California State Licensing Board obliges roofing licensees to carry a workers’ compensation certificate or have valid self-insurance, regardless of whether they have employees.
Self-employed electricians or roofers must be insured to cover medical expenses incurred by accident. It is vital to protect your business from the worst possible scenarios.
Just imagine a scenario of having to pay medical bills while recovering from an injury, which makes you unable to work. The same goes for paying medical bills for any of your workers who get injured accidentally.
3. What kind of contractor insurance do you need for your work truck?
The following question to ask yourself prior to purchasing contractor insurance is what kind of policy you need for your work truck.
Commercial auto insurance is necessary for all vehicles used specifically for carrying out contracting work, such as transporting equipment, employees, and tools. Keep in mind that personal auto policies don’t cover the vehicles used for carrying out contracting business.
Most businesses use vehicles for transporting heavy and expensive equipment, some of which are even specially modified to fit the needs of contractors. Consequently, the vehicles themselves are part of the equipment.
If your business owns a range of vehicles and if any of them are registered under the name of your company, commercial instead of personal auto coverage is necessary.
To sum up: Questions to ask when purchasing contractor insurance
By getting an answer to these questions, you will facilitate your decision-making process. Shop for the best policy that offers protection to every aspect of your business!
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I am Adeyemi Adetilewa, a media consultant, entrepreneur, husband, and father. Founder and Editor-In-Chief of Ideas Plus Business Magazine, online business resources for entrepreneurs. I help brands share unique and impactful stories through the use of public relations, advertising, and online marketing. My work has been featured on the Huffington Post, Thrive Global, Addicted2Success, Hackernoon, The Good Men Project, and other publications.