As a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Written By Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Jason Metz Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others mak.
Lead Editor, Insurance Michelle Megna Lead Editor, InsuranceMichelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine.
Michelle Megna Lead Editor, InsuranceMichelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine.
Michelle Megna Lead Editor, InsuranceMichelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine.
Michelle Megna Lead Editor, InsuranceMichelle is a lead editor at Forbes Advisor. She has been a journalist for over 35 years, writing about insurance for consumers for the last decade. Prior to covering insurance, Michelle was a lifestyle reporter at the New York Daily News, a magazine.
| Lead Editor, Insurance
Updated: Apr 18, 2023, 4:38pm
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
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Whether you have a job to remodel a kitchen, build a patio or install a jacuzzi bathtub, plenty of things can go wrong in the process. For example, faulty plumbing could lead to a water leak and thousands of dollars in property damage. Or your employee might hurt themselves on the job. That’s why you need contractors insurance.
Here are some ways to find cheap business insurance:
A contractor is hired by a client to complete a project. For example, a homeowner hires you to build an addition to their home. A contractor can be broken down into two types:
No matter if your business does general contractor or subcontractor work, you need contractor insurance to protect your business from work-related accidents. Here are examples of contractors that would need contractor insurance:
A good contractor insurance policy contains several types of small business insurance that cover your business from a variety of problems. Those issues can include the cost of claims, lawsuits and damages to your business property. The coverage types you choose depend on the contractor business’ specific needs.
A good place to start is with a business owners policy (BOP). A BOP bundles three essential coverage types, and it’s typically cheaper than buying each coverage type separately.
Here’s what a BOP includes:
This is the foundation of a small business insurance policy. Business liability insurance covers property damage and bodily injuries accidentally caused to others (not including your employees). For example, if your tree service causes a heavy branch to land on a client’s roof, you can tap your general liability insurance to pay for repairs.
This covers your business’s physical location and business equipment if they’re damaged due to a problem covered by your policy, such as a tornado. Commercial property insurance covers both leased and owned equipment, including items like office furniture, tools, inventory, supplies, computers, business records and valuable papers.
If you have to temporarily close your business due to a problem covered by your policy, like a theft or fire, business interruption insurance replaces lost income. Also known as “business income insurance,” this covers problems such as wind damage, lost earnings, money lost due to damaged merchandise and the cost of moving to a new location temporarily.
There are several types of problems that contractors insurance won’t cover. Here are some examples of common exclusions:
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While a BOP lays a solid foundation for your contractors insurance policy, you may want to bolster your insurance with additional coverage types. It’s a good idea to speak with your agent and buy enough insurance to meet the demands of your business.
Here are some common small business insurance types to consider:
Builder’s risk insurance covers property and construction materials while you’re working on a project. You can typically buy builders’ risk policies for new construction projects, installation work and remodeling. This coverage is also called “course of construction insurance.”
If you use a car for work-related tasks, such as meeting with clients or transporting materials to a job site, you need commercial auto insurance. Your personal car insurance won’t cover business use.
Here are some examples of business use:
Here are common commercial auto insurance coverage types:
If you need an extra layer of protection on top of your general liability insurance, you may want to consider adding commercial umbrella insurance. For example, if your business gets sued for $900,000 and your general liability limits are $500,000, umbrella insurance would cover the $400,000 shortfall.
If your tools and equipment are lost, stolen or damaged, this covers the cost to repair and replace them. For example, if someone swipes an expensive power saw from the job site. This coverage may have specific limitations. For example, contractor’s tools and equipment insurance from Insureon is limited to small tools, mobile equipment and equipment less than five years old.
If you rely on certain types of machinery and tools to complete your projects, this insurance type covers the cost to repair and replace your equipment due to unexpected breakdowns. It doesn’t cover normal wear and tear.
Also known as professional liability, this covers you when a client accuses you of not having done your work properly, whether the accusation has merit or not. For example, if you’re a plumber and a client says your poor workmanship caused a leak and water damage, errors and omissions insurance covers your legal costs, court judgments and settlements.
If you or your employees use a personally owned or rented car for business use, this covers injuries and property damage caused to someone else. For example, your employee drives a rented van to deliver materials to a job site.
This covers your mobile machinery and tools while in transit to the job site. This is also called “property in transit” insurance. You can also add an installation floater endorsement that covers your machinery, equipment, and materials while awaiting installation.
In addition to these coverage types, you may be required to have a surety bond to get a business license or permit. A surety bond covers the cost of claims about poor or incomplete workmanship, as well as fraud and theft. This is the type of bond the term “bonded and insured” refers to.
Most states require workers compensation insurance, even if you only employ a single worker. It covers medical expenses, lost wages and disability benefits if your employees get ill or injured while doing job-related duties.
Here’s a look at a few claims scenarios and the contractors insurance coverage type that would apply:
A good contractors insurance policy is a mix of essential coverage types that meet the specific risks your company faces. Most insurers sell common types of business insurance that you can select to customize your policy, such as a BOP, commercial auto insurance and workers compensation.
Here is a list of some small business insurance companies:.
Compare Free Quotes From Top Insurers at Simply Business. Get a Policy in Under 10 Minutes.
Depending on your state, some types of small business insurance are required by law. Most states require employers to have workers compensation insurance. Even if you are a self-contractor and don’t have any employees, you may want to get a business owners policy (BOP). A BOP can help protect your business from financially disastrous problems like lawsuits, destroyed business property and lost income.
As a handyperson, you are performing contract work. For example, a client hires you to do minor repairs or maintenance services. But even a small job can have big problems without proper insurance. For instance, if you accidentally spill a can of paint on a client’s antique rug. That’s where general liability insurance comes in. It covers injuries and property damage you accidentally cause to others. It’s a good idea to speak with an insurance agent about what types of small business insurance will meet the unique risks that come with a handyperson business.
If you are using a car for work-related purposes, such as going to a job site or transporting material, you will need to get a commercial auto policy. Your personal car insurance policy won’t cover business use.
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Lead Editor, InsuranceAs a former claims handler and fraud investigator, Jason Metz has worked on a multitude of complex and multifaceted claims. The insurance industry can be seemingly opaque, and Jason enjoys breaking down confusing terms and products to help others make well-informed decisions.
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