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5 Reasons to Have Contractor Insurance for Your Contracting Company

Jul 21, 2022

Contractors Insurance

5 Reasons to Have Contractor Insurance for Your Contracting Company

Whether you install roofs, plumbing systems, floors, or electricals, you should have proper contractor insurance to boost your chances of success in the competitive industry. Most of your prospective clients, including other businesses, general contractors, and homeowners, will demand proof of insurance and licensing before hiring you. Recall that offering the lowest price to repair a roof won’t always win you business. Due to the many reports of scammers offering low rates and doing shoddy work, people are today more cautious than ever when hiring contractors. One way to differentiate your company as a reputable, credible business that operates with utmost care is by investing in proper insurance for contractors.

Reasons to get contractors insurance for your company

  1. To Meet Your State’s Licensing Requirements

    In most states, you can’t get a contractor's license without general liability (GL) insurance. It’s one of the regulations you must satisfy to start your contracting business in a specific location.

  2. To Boost Your Competitiveness in the Market

    Many clients, whether residential or commercial property owners, know the importance of having insurance coverage. They’ll only hire contractors with proper insurance, especially a GL policy. So, having contractors insurance boosts your reputation as a serious contender for contracts. It enhances your company’s attractiveness to potential clients as it also guarantees protection in case a covered incident occurs.

  3. For Liability Claims Protection    

    Contractors insurance provides liability protection in case of injuries for which your contracting company is liable. Likewise, it covers any property damage you or your employee may cause while doing contract work for a client. With proper liability coverage, your insurance company settles or pays any such claims against your contracting business.

  4. For Coverage of Legal Expenses

    Sometimes, a client or a third party, such as a bystander, may sue your company for an injury or property damage you caused. In such a case, you need to hire an attorney to represent you in court. Also, you will incur various legal/court expenses. Contractor insurance would pay for these legal costs.

  5. For Greater Peace of Mind

    Contractors insurance ensures that uncertainties like property damage or third-party injuries won’t interrupt your business if they occur. 

What is Covered by Contractors Insurance?

You need different types of insurance policies to meet some of the responsibilities that come with being a competent contractor. One of the most crucial policies to carry is general liability. Here are the protections you get when you have a GL policy for contractors:

  • Property damage, such as damaging the floor or roof while doing repair work on a client’s property
  • Injuries sustained by clients or third parties, such as a customer slipping on a wet floor 
  • Medical payments for injuries
  • Claims of reputational harm, such as a competitor alleging you hurt their reputation in a social media ad
  • Completed product coverage for claims related to a project you’ve already completed   

Also Read: Do Independent Contractors Require Workers Compensation Insurance?

Your success in the contracting business relies on many things, chief among them, having proper contractors insurance. If you need this coverage to cushion your company against potentially costly liabilities, contact our professionals at Riverbend Insurance. We’re happy to help you find adequate coverage for your specific requirements.