Contractors typically have varying insurance needs based on their specific situation, but the below categories are the most common and recommended insurance for contractors:
- General Liability – According to www.sba.gov, general liability insurance “protects a company’s assets and pays for obligations – medical costs, for example –incurred if someone gets hurt on your property or when there are property damages or injuries caused by you or your employees. Liability insurance also covers the cost of your legal defense and any settlement or award should you be successfully sued. Typically these include compensatory damages, nonmonetary losses suffered by the injured party, and punitive damages.”
- Workers Compensation (Work Comp) – Workers Compensation laws vary by state, so check with your Trusted Choice insurance professional for guidance on limits and requirements. Workers compensation is designed to cover wage replacement and medical benefits if injured in the course of employment. Alabama requires that employers with more than five employees carry work comp coverage. It’s important to note – even if the law doesn’t require your business to carry work comp, an exposure still exists. For a contractor who owns his own business and hires sub-contractors, it is a good idea for those sub-contractors to be licensed and insured with their own general liability and work comp policies. If those sub-contractors carry their own work comp coverage, this can positively affect the lead contractor’s work comp premiums.
- Property – Business Insurance Now suggests that commercial property be one of the first types of coverage a new enterprise should look into. “This coverage protects you from some of the risk that the property your company owns could be lost stolen or damaged. If you don’t own the building where you do business, you’ll only need to cover the building’s contents.” Business personal property insurance protects items such as fixtures, furniture, office equipment, inventory, and supplies that are housed on or off site. Another critical property coverage is Business Income, which will reimburse a business owner for lost income due to a property loss.
- Inland Marine – Don’t let the name fool you… the term may be a bit outdated, but it is remains an important type of coverage. Inland Marine covers property in transit over land, and essentially covers these categories: Imports; Exports; Domestic Shipments; Bridges, tunnels and other instrumentalities of transportation and communication; Personal property floater risks; and, Commercial property floater risks (source, Erie Insurance). According to Wikipedia, “Despite the word marine, most inland marine coverages are for property on land, with property transported by water insured under ocean marine.” This type of insurance policy can also be commonly called “floater” policies because coverage is provided without regard to the location of the covered property. A contractor may need inland marine coverage for such equipment items as trailers, tractors, cranes, backhoes, etc.
At SSIA, our account executives are well schooled in the types of coverage contractors should carry, and we are happy to provide a complimentary business review to make sure you are covered properly. Contact us to learn more (251) 923-4463!
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