While there isn’t a specific coverage or policy called contractors insurance, it is no industry secret that the insurance needs of a contractor are different from a lot of other business types. Most contractors either work under a General Contractor (GC) or they are the GC. For the former, you are probably required to carry certain limits on your policy and show proof through a certificate of insurance. There is also something known as WRAP insurance that contractors in Colorado often carry for larger job/projects.
So what is important for a contractor to know when looking for insurance? The simple answer is… there is no simple answer. A contractor doing concrete flatwork will have different needs than an electrician or an HVAC company. Every contractor is going to need some form of liability coverage. This is required by most developers and general contractors before you can even step foot on a jobsite. Your general liability covers your day to day activities required to perform work and run your business.
WRAP insurance is oftentimes offered or required by a large contractor. This insurance covers liability for that specific job. Think of this as the GC making you have coverage for liability resulting from the product you make or the work you do while on site.
Most contractors also have employees. This means there is a need for workers compensation insurance. Many contractors believe they can skirt around workers compensation by only using subcontractors, but this is not always true. If you use subcontractors, we highly recommend obtaining proof of their insurance, and depending on the job you may need to have your company listed as an additional insured or certificate holder.
Tools and Equipment Coverage is also a big area of concern for contractors seeking insurance. A single drill bit can cost over $100, not to mention power tools and other equipment used to complete a job. Imagine pulling up to a jobsite to find out all your tools and equipment were stolen. If you can’t comfortably replace all your tools and equipment, then its time to have a conversation with your agent about adding that coverage.
Contractors have a lot of exposure for an injured employee, construction defect claims, and having adequate coverage for equipment. If you are shopping for insurance and you are a contractor in Colorado please give us a call. We will take the time to learn about your business to make sure you have the appropriate coverage for the unexpected.