Why Do You Need Contractors Insurance?

We often receive questions about why individualized insurance coverage is important. Maybe you too wonder this at times when questioning if you need insurance coverage for something. It is important to remind yourself why you purchase insurance in the first place: for protection against risks and liabilities. Let’s take a deeper look into why contractors need insurance.

What is Contractors Insurance?

Contractors are hired by companies and individuals to complete a specialized job. What happens to you, the contractor, if something goes wrong and you find yourself liable for more than just the contracted work? Contractors insurance provides contractors and construction companies protection for a variety of risks and liabilities that come with this line of specialized work. Examples of coverage include financial protection against injuries, property damage, faulty workmanship, and other potential risks that contractors may face in their line of work. (EMC)

What Lines of Work Need Contractors Insurance?

When referring to contractors insurance, insurance agents consider this industry coverage as commercial insurance. Contractors, subcontractors and independent tradesmen should have this coverage. Just like other industries require protection over you, your business and your employees, so do contractors. In fact, many workplaces will require you to carry your own insurance before work can begin! If you find yourself in one of the lines of work below, have you checked if you have the right coverage?

  • Carpenters
  • Drywall Contractors
  • Electricians
  • General Contractors
  • Interior Decorators
  • Lawn Care
  • Masonry
  • Sheet Metal Workers
  • Excavators

What Type of Insurance Does Contractors Need?

There are several types of insurance to consider when ensuring that your business is adequately covered. Below is a list of essential types of insurance coverage:

Contractors insurance

General Liability Insurance for Contractors

Construction contractors face unique liability risks in their day-to-day operations. General liability insurance protects your business against liability exposures such as injuries, damage to a customer's property or faulty workmanship.

Essential Property Coverage

This vital insurance component protects your buildings, tools and equipment against physical damage, including risks such as fire, theft or natural disasters.

Business Auto Coverage

Provides coverage for company-owned and personal vehicles used to transport tools, equipment, and personnel to job sites. This coverage protects vehicles against potential accidents, damages or liabilities that may arise during business-related activities.

Contractors Errors and Omissions Insurance

Mistakes happen, even to the most experienced contractors. This optional coverage provides financial protection in case of an error or mistake during your construction process.

Umbrella Coverage

This provides an extra layer of protection by offering additional security in the event of a catastrophic liability claim that would otherwise exceed your coverage limits. Think of it as a safety net, extending your liability coverage to safeguard your business in the face of a major claim.

Contractual Risk Transfer

This coverage uses contractual obligations to pass on a potential risk to another party. The transfer can be done with indemnity and exculpatory agreements, waivers of recovery rights and insurance requirements to pass along to others what would otherwise be one’s own risk of loss.

Workers’ Compensation Insurance

This specialized protection covers medical expenses and compensation for workers injured on the job.

We're Here with the Right Coverage

We are an independent agency that represents multiple commercial insurance carriers. This allows us the opportunity to customize coverage and find the right fit for everyone. Contact our knowledgeable and experienced team at Minnesota River Insurance in Mankato to explore our comprehensive selection of customized coverages.

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