If you’re a contractor, there are a number of unique risks you should pay attention to whether you work on your own or for a larger contracting business. Besides having the proper safety training, risk management procedures and loss prevention programs, you also need the right insurance protection that will help to protect you from the unique risks to your trade. We outline three of the most common risks here.
Three common risks facing contractors
Liability risk
As a professional contractor, you take on a lot of responsibility on the job, where a mistake could cause serious harm or damage to yourself, your coworkers, your customers and their property. One of the most costly and damaging risks is causing harm or property damage while performing your work. A simple mistake or oversight can have a big impact on your customers’ property or cause serious injury to someone visiting the job site.
Whether you’re working on a larger construction project or hired to do a smaller renovation, if something goes wrong you could be held liable and face an expensive lawsuit. Commercial General Liability insurance for contractors can help to protect you and your business from the financial consequences of a lawsuit. You can also get Completed Operations coverage so that you‘re protected if anything happens after the job is completed.
Property risk
When you’re not at a customer job site or on the road, all of your equipment is safely locked away at the shop. Whether you have a business location or your shop is simply the garage of your home, you need to make sure your property is properly insured. A fire, flood or backed-up sewer could damage your shop and all of its contents.
Commercial Property insurance is a must-have. It protects your shop, its contents and supplies if they get damaged. You can also include Business Interruption coverage to help cover you when income is lost due to a claim. This type of coverage can help keep your contracting company in business while recovering from a loss.
Theft risk
To get the job done, you rely on specialized tools and equipment that can be expensive to purchase, maintain and repair. While you might take every precaution to ensure that your tools are clearly marked and properly secured, some things are out of your control.
Not all job sites are equal. Construction site theft is an ongoing issue and job site managers need to take serious job site security measures. Contractor tools are popular targets for theft because they can be quickly re-sold on the black market. There’s also other equipment like appliances, supplies and copper wiring, which are also popular targets for thieves. Throughout 2016 there were plenty of news articles detailing thefts from construction sites from coast to coast.
That’s why it’s important to have specific coverage for your tools and equipment in your business insurance policy, so they’re protected from theft and breakdown. This type of coverage can also reimburse you for the cost of renting tools in the meantime.
Your bottom line
Having insurance isn’t just about protecting your business; it’s also about providing your current and future customers with peace of mind. Having adequate coverage for the job and proof of insurance shows that you’re a professional who can be trusted.
