NYC Insurance Blog

How to Choose the Right Residential Contractors Insurance.

Since construction is considered a high-risk industry, every contracting business should purchase the right contractor business insurance policy. Contractors’ insurance refers to the policies that protect construction industry businesses against possible financial losses. If you buy the right contractor insurance policy, it can help cover most liabilities, including legal defense costs, medical bills for injured workers, equipment repair or replacement, etc. In most cases, residential contractors must have insurance liability coverage to save them from any financial losses if there is property damage or third-party injuries resulting from accidents or mistakes. 

Residential contractors should familiarize themselves with different insurance policies to make the right choice. Remember, you can customize residential contractor insurance to fit your needs. However, you should know the must-have insurance policies to protect yourself and your business. Here are crucial insurance policies to purchase:

1. Professional Liability Insurance (Errors and Omissions)

Errors and omissions insurance (E&O) covers any legal expenses incurred from professional negligence or mistakes. Professional liability insurance also covers advertising injury and other losses related to negligence. Contractors should purchase general liability and professional liability insurance to protect themselves against financial losses and lawsuits. However, subcontractors can carry professional liability insurance as an additional insured in a general contractor’s Business Owners Policy (BOP). Give us a Call Today! We can help get you the right coverage for your Business.

2. General Liability Insurance

Also known as commercial general liability insurance, it is among the most important insurance policies a contractor should purchase. This policy covers the costs if you or your employee cause property damage or bodily harm. In most US states, contractors must provide proof of general liability coverage to get a general contractor license. Although a subcontractor can carry the general liability insurance policy by being an additional insured in a BOP, purchasing your own general liability insurance directly from an insurance provider is advisable.

3. Workers’ Compensation Insurance

Workers’ comp is crucial to any business with employees. In fact, workers comp is a necessity in most states to protect the workers. The policy overs employees’ lost wages and medical treatment if they suffer work-related illness or injury. Without this policy, the employer may have to pay the medical bills and other losses out of pocket. 

4. Commercial Auto Insurance

Also known as automobile liability or auto liability is vital to protect you from any financial losses if any of your business work vehicles are involved in an accident-causing bodily injury or property damage. The auto liability insurance pays for the resulting legal fees, repairs and replacement costs, and other accident-associated costs. 

5. Tools and Equipment Insurance

What would it cost to replace the tools and equipment you have acquired over the years? Your professional tools and equipment are vital. Ergo, the tools and equipment insurance helps cover the repair or replacement costs if damaged, lost, or stolen. With such a policy, it is easier to start working quickly, thus avoiding significant financial losses. 

Residential contractors can purchase insurance directly from an insurance company or an independent insurance agent. Besides reviewing the types of coverage your construction business needs, working with a reputable insurance agent can help you choose the right contractor insurance. We will help you assess the amount of insurance you need, and help you understand the coverage.

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