Don't make this costly mistake other contractors made

Many business owners go for the cheapest option with an aim of saving something in the end. However, going for the cheapest insurance policy may cost you a lot more in the long run. Buying a policy based solely on its monthly premiums could mean you actually do not have the coverage you need in the event that you need to file a claim. The only way to avoid this is to look for a local independent insurance agent to help you compare different insurance policies and go for the best that suits your business.

Failing to take time to read the policy.

Many people fail to read through the entire insurance policy since it is quite an expansive document. This may lead to you being surprised when you are filing a claim. The only solution here is to ensure that you have read through the document properly and gain clarity over every detail.

Many business owners think of a disaster as a situation where your physical property falls at risk of being damaged. However, many people fail to recognize the damages they accrue like the loss of income due to downtime. The solution to this is asking your insurance agent about the value of adding business income coverage to your policy.

Every business owner understands that their establishment continually faces different kinds of risks. The sole purpose of insurance is to help one protect their business from these unforeseeable risks. What business insurance does, helps protect your business financial assets, physical property, and intellectual status from the following risks;

• Employee injuries and illness
• Loss of income
• Vandalism
• Theft
• Damage of property
• Different kinds of lawsuits

Business or contractors insurance helps you to easily manage your company’s risks. It guards you against losses that occur during normal business operations. When you buy contractor insurance coverage, the insurance company helps you cover the cost of losses that arise and are within the policy. If you are not covered, you may be compelled to pay for the losses.

Here are some of the most critical questions you should ask your insurance broker.

What is your experience in the business insurance industry?

This is a question you have to ask before anything else. The response you get will help you in deciding to hire the insurance broker or not. You will need someone who has experience in the business insurance industry sector.

How many insurance companies do you access for my policy needs?

They should have a couple of them to show their seriousness in you and your needs.

Will you check with me and update me throughout the year?

If the answer is yes, then you will know they are the right fit for you.

Under business or contractors insurance, we will look at Builders Risk that covers property, Contractor general liability insurance, and Contractor’s equipment insurance.

Commonly refers as builders risk or course of construction, The insurance is design for protection providing financial compensation for losses incurred on a building or structure. We all know that unforeseen events, errors, mistakes can occur in the building at any given time. Construction companies or other parties who are interested in purchasing the property need to have construction insurance.

Another way to look at this is by considering construction projects. Construction projects are often expensive and expose huge risks considering the materials and man-power required to finish the project. Carrying out the construction activity can be incredibly risky without construction insurance. This insurance helps the people involved in the projects to have peace of mind. Listed below are the types of construction insurance.

Refers to Builders Risk here for detail

Many belief the role of insurance is to protect their assets. True to some extend but what a misconception small business has is, if they have very little assets for their business, there is nothing they have to lose and have no need for insurance protection. Unfortunately, this may not be the case if they are operating on other sites. If they dropped a hammer, a wind blew off the scaffolding smashing a very expensive car on the road side, they will have to pay for the damage. All businesses need liability insurance to protect themselves when the unfortunate event happens. There are difference type of liability insurance as below.

Every business out there should invest in general liability insurance and most particularly those in the construction industry. It protects your company from a variety of liabilities such as subsequent medical expenses and injury claims.

The insurance protects contractors financially from damages they may be compelled to pay as a result of damages, medical bills, third party injuries, or property damage incurred in relation to the contractor’s work. Contractors are advised to buy this insurance cover for their own protection. This insurance helps contractors get their tenders for projects quickly accepted. Here’s is what the contractor general liability insurance covers;

Personal and advertising injury- Injury arising from wrongful eviction, malicious prosecution, infringement of copyrights, etc is covered by this insurance policy.
Medical Payments- You get covered for medical expenses that arise due to injury while carrying out the project.
Property Damage- Physical property damages accrued to other people while working on the project are covered.
Bodily Injury- Disease, sickness, or injury sustained by a person working on the project or even death is covered by this insurance policy.

If you are involved in designing, that’s where professional liability insurance comes in as it covers engineering or design errors or modifications that may require to be done that may cause a major issue. This insurance policy covers for mistakes that may have financial implications on the entire project.

This policy provides coverage if your company or business is liable for a pollution occurrence that has occurred on the worksite.

This policy covers vehicles that are being used to carry out the company’s activities. These vehicles range from trucks, cars, and other large automotive. These vehicles are exposed to a number of risks and this insurance policy covers that.

This policy protects employees from lost wages and medical expenses which one suffers while working. It also protects the company from lawsuits related to those types of injuries.

This type of insurance helps protect the company’s data as well as that of your customers and third-party vendors.

This is an insurance policy that covers specific tools and equipment which are in the possession or owned by a contractor. It provides protection for equipment and tools against risks such as theft, fire, flood, vandalism among many others.

This policy applies to contractors who own or hire expensive equipment and tools. Among the tools and equipment covered include mobile equipment which is carried from one location to another. Examples of this equipment include concrete mixers, compressors, generators, draglines, hand tools, power shovels, forklifts, bulldozers, cranes, earthmovers among many others.

Contractors can go further and ensure equipment that is under their control and care even though they are owned by another contractor.

In the event of a covered loss, the contactor's equipment insurance policy will help cover the loss accrued. It can also pay the costs to expedite a project which is off schedule as a result of a loss that is covered.

A construction Surety bond is a legal agreement in which the bonding company (surety) guarantees a contractor will perform their obligations accordingly to the specification of the contract signed. The construction surety Bonds are required for projects that are tendered by government or most public projects but it has now becoming more common requested by private projects.

The common Contractor Insurance is usually designed to protect the insured in two main categories.

1. Liability - Any negligences resulting in other people's injury or suffered financial loss. In other words, the 3rd party coverage.
2. Own Property - Such as damage in the insured tools, investment or any material. In short, the first-party policy holder's coverage.

To further clarify, a Contractors General Liability Insurance protects contractors financially from financial loss when they become obligated to :

 - pay due to damages or medical payments because someone suffered from bodily injury, property damage or personal/advertising injury to third parties and when it is occurring during the policy period caused by or relating to the contractor's negligence. (You can read more on Commercial General Liability here). 

The property insurance covers insured from financial loss due to loss of use, business interruption, tools or building.

If you run a business that produces income through a service contract and has no employees, you're considered self-employed. You can buy private health insurance, Commercial General, Professional Liability and property insurance through this website by clicking "get a quote below." You're not considered an employer only because you hire independent contractors to do some work.

Most contractors will be asked for a "proof of insurance certificate" as a normal business practice before being offered a contract. The contractor can ask their insurance broker for this certificate. It will have the name, policy number, insured address, nature of the business, beginning and expiry date, insurance company information and address. In most circumstances, the company requesting the certificate may also ask to include their name as additional insured on the policy.

The cost of an insurance premium for Commercial General Liability solely depends on the line of business. If you are welding in the military or oil and gas site, the premium will be high compared with a janitorial contractor working for a commercial office. Another factor that impacts the premium will be the annual revenue (as more business means more risk exposure), industry, number of employees, the crime rate in the area, claims ratio from industry peers doing similar jobs. We have started to see the credit score of the owner may impact the premium as well. Based on our experience, standard general liability insurance for low exposure contractor is surprisingly affordable. Most policies cost less than $1,000 per year. A $1 million policy costs $500 to $1,000 per year. While a $2 million worth of coverage will cost an average of $800. Again, these are for references only and subject to many variables, and it goes on a case by case basis. Please click below for a more accurate quote. 

• Commercial General liability insurance
• Commercial Property and equipment insurance.
• Boiler and Equipment insurance.
• Employee tools insurance.
• Crime
• Business interruption insurance.

Doing Work as an Independent Contractor: How to Protect Yourself and Price Your Services

1. Protect your social security number
2. Have a clearly defined scope of work and contract in place with clients. Any subcontractor you hire, ensure they are licensed if it is regulated industry, insured and best of all, bonded.
3. Get general/professional liability insurance. 
4. Consider incorporating or creating a limited liability company.

It is illegal for an unlicensed person to perform contracting work on any project if the work is regulated by-law. If an unlicensed contractor tries to sue someone who hired him/her for unpaid work, no court will enforce payment! On the other hand, any damage caused by the unlicensed contractor to a third party may be liable to you or your insurance. Resulting in an increase in your contractor insurance premium or outright decline on your insurance renewal the following year. 

How Do I Handle Damage Caused by a sub Contractor?

1. Start With Your Insurance Company. Call your insurance broker and explain the problem.
2. Call the contractor and explain that you've already talked to your insurance company.
3. Keep Cleanup to a Minimum.

Always ensure your sub-contractors have their insurance and request "proof of insurance" with your company as additional insured on the insurance certificate before allowing them access to a site.

In a regulated professional such as HVAC, Plumbing, Electrician, if the contractor is licensed, it means that they have a legitimate claim to be a professional in their industry. Having a license also shows that the contractor is serious about each job they do, and they won't cut corners when it comes to their work on your construction project. 

As a self-employed contractor, it is your responsibility to make sure your insurance covers are not only right for your business but they offer adequate cover. You can take many insurances, but, as mentioned above, two of the most important are Commercial General Liability and Professional Liability insurance.

The most appealing contractors are often both bonded and insured. Insurance protects you in the event of an accident and allows you to operate legally. Bonds help create a trust that you'll complete the required project and allow you to work on public jobs.

Some other best practices to keep in mind as you finalize a written agreement:

1. Make sure the subcontractor or yourself obtains a permit if the job requires one. 
2. Ask for a copy of the subcontractor's license and proof of insurance. 
3. Pay by check and get a receipt. 
4. Document any changes to the contract in writing.
5. Keep a file for all related paperwork.

Most suppliers and subcontractors will only work with a contractor who has a bond in place. To determine whether your contractor is bonded, ask him or her for a bond number and certification. You should take extra precautions to ensure that both the bond and the license are up to date.

1. Licensed. Ask if the business is licensed and, if so, with whom. Then contact the licensing agency to confirm. ...
2. Insured. Ask the company to have its agent send a Certificate of Insurance directly to you. ...
3. Bonded. Bonding is often a misunderstood and unique insurance product.