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Five Types of Insurance Coverage You Need to Grow Your Business

For every contractor, insurance is part of the cost of doing business. But not every contractor has the right coverage for the projects they’re working on.

That’s why it’s important that they take the time to review their coverage on a regular basis to make sure it is in alignment with their current needs. Otherwise, they run the risk of their business being held liable or run the risk of losing money that they need to grow their business.

Here are five types of insurance coverage that every contractor should make sure they have.

1. General Liability

General Liability Insurance acts as a platform that can combine a wide range of smaller policies that provide contractors with coverage when they’re on the job.

Policies that can be part of general liability coverage can include:

  • Builder’s Risk
  • Umbrella/Excess Liability
  • Professional Liability
  • Contractor’s Pollution Liability
  • Property and Crime Coverage

The challenge for contractors is ensuring that the type and level of coverage that they carry is sufficient to the requirements of their current contracts.

2. Workers’ Compensation

Your team members work under dangerous conditions. No matter how much you invest in safety and training, someone is going to get hurt. It’s the reality of being a contractor.

When that happens, your business can be held responsible for medical expenses and lost wages. Also, if an employee decides to sue, your business can face additional legal fees.

That’s why every contracting business needs to have a workers’ compensation policy in place to protect their employees and themselves.

Different states have different requirements for workers’ compensation in terms of whether coverage is required, how much is required based on the size of your business and even where and how you can purchase workers’ compensation.

If your business works across state lines, you need to ensure that your workers’ compensation policy is properly written to include these states. In many cases policies will extend across state lines, but only if the carrier is licensed in that state. Even if it is covered, those states have regulations as to how long you can work there on your existing policy.

3. Commercial Auto

As a contractor, if you can’t get your team members, equipment, supplies, and clients to the job site, you can’t get the job done.

It doesn’t matter if you or your team members are driving company vehicles or personal vehicles. When accidents happen, your business can be held liable.

This is why you need to make sure you have a commercial auto policy that fits the needs of your business.

While rates for commercial auto insurance don’t vary that much from carrier to carrier, it’s important to remember that your coverage needs to not only cover your equipment and vehicles, it also needs to supplement your team’s personal liability coverage.

4. EPLI – Employment Practice Liability Insurance (EPLI)

One of the fastest growing and most expensive issues facing contractors are employment practice claims.

These often involve a variety of issues, such as sexual harassment, hostile work environment, age discrimination and wage and hour claims for nonexempt employees claiming lost compensation.

In particular, wage and hour claims are typically brought as class-action suits which can make them extremely expensive.

That’s why more and more businesses are investing in Employment Practice Liability Insurance (EPLI). In the event of claims or lawsuits filed by employees, former employees and employment candidates, EPLI coverage protects your company by covering the expenses involved in defending your business against claims or lawsuits. EPLI coverage should help to cover legal expenses and also provides for indemnification if the case is settled, or a verdict is obtained against your business.

5. Equipment Floater

The loss of a hammer or wrench probably won’t have that big an effect on your bottom line; but what about your new laser level? Making sure you have the right coverage to protect your specialized equipment, high-end tools, and moveable equipment from loss, theft or damage can protect you

When it comes to getting the right kind of coverage, it’s important that you work with an insurance agent who understands the construction industry. Take advantage of their insights to make sure that you are getting the coverage your business needs. Not just for the present, but also for the future.

Ready to put Ox Bonding’s experience to work for you? Download an enrollment application or call us today at (877) 55-THE-OX.


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