Contractor Insurance

Each construction practice is different, and insurance requirements will vary by service; however, contractors insurance typically includes the following policies:

• Commercial General Liability (CGL) Insurance – The most common and perhaps most important form of coverage for contracting trades is commercial general liability insurance. CGL is a liability insurance policy for contractors that protects you and your business against common claims you may run into at a job site, such as third-party property damage (e.g., damaging a client’s home) or bodily injuries (e.g., a slip and fall). Should your business be named in a lawsuit, CGL may cover medical expenses and legal fees, regardless of the outcome. Important note for contractors, your policy coverage limit applies to all employees of your business, not each employee. One option to accommodate all of your employees is to increase your limit. Hiring sub-contractors that carry liability insurance is another way to ensure all parties have adequate coverage.

• Tools and Equipment Insurance – Your tools and equipment are likely your most important assets, making equipment and tools insurance critical. This policy provides coverage to replace or repair lost or damaged equipment and tools, accessories, or others property in your care. Anything valued at less than $1,500 is considered a tool, whereas anything above is considered equipment.

• Pollution Liability Insurance – As an industry, construction produces more pollution than aviation. While not every project is going to have a large-scale impact, environmental liability is on the rise. Neglecting to seal a construction site or an improperly fitted pipe can lead to severe damage down the line. Pollution liability insurance covers clean-up costs, bodily injuries (e.g., respiratory illnesses), or property damages (e.g., water damage) caused by pollution or toxic substances produced due to your work on a covered job site.

• Builder’s Risk Insurance – Also known as Construction Liability Insurance, Builder’s Risk protects your building and liability against expensive property claims throughout a project’s duration. Contractors typically require their clients to carry this coverage, although sometimes you may be responsible. When finalizing the details of a project, be sure to confirm who will be responsible for purchasing the policy and ensure all involved parties are covered.

• Contractors do not typically require Professional Liability Insurance. However, if you offer advice or consulting as part of your services, consider adding it to your policy to protect against claims alleging you gave incorrect information or failed to deliver a service as promised.

Due to the variation across trades, finding a one-size-fits-all policy may be difficult. Speak with one of our specialized brokers to see if any of these additional coverages are right for your business:

• Products-Completed Operations Liability – Protects you and your business against customer lawsuits alleging property damage (e.g., faulty pipes) or a bodily injury after you have already completed a service or project.

• Non-Owned Auto Insurance – Auto coverage for vehicles used in connection with your business that you don’t own, lease, rent, or borrow. For example, this coverage could apply to an employee who uses their vehicle for company business.

• Tenants Legal Liability – This policy covers loss or damage to property that your rent or occupy (but do not own) for business purposes, such as a temporary office space near a job site.

• Installation Floater – This is an additional form of coverage, typically included with Builder’s Risk policies, which protect the tools and materials you use during construction from theft, loss, or damage.

• Leased, Rented, Borrowed Equipment – Coverage for loss or damage to materials and equipment you lease, rent, or borrow.