Contractors Insurance

General Liability protects a contractor in the event they damage something or hurt someone.  It also includes coverage for completed operations, should they become liable for damage due to their finished work.  It is what we term a foundational coverage, one of the most important insurance policies for contractors.  Damage to their own work is excluded as the policy is not designed to cover defective workmanship.  It also excludes injury to a contractor’s employees as that is properly covered elsewhere.  Claims examples are a good way to explain the coverage.

• A general contractor is roofing building they are constructing and drops a bundle of shingles on a bystander.  General liability would respond to pay the medical bills of the injured party.  Should the shingles have dropped onto a car parked nearby, it would pay to repair the vehicle.
• A resident of a new home is climbing stairs when the banister fails and they fall, breaking an arm.  General liability would pay for the medical bills to the resident.  It would not, however, pay to repair the banister since that is the contractor’s own work.
• An electrical subcontractor wires a home and soon thereafter the home burns down.  If the cause of the fire was due to electrical reasons, the electrician’s general liability would pay to rebuild the home.  It would not, however, pay for the electrician’s portion of the faulty wiring that caused the damage.
• A general contractor improperly installs flashing around a doorway.  A year later, water damage to the surrounding walls is discovered.  General liability would not pay for this damage, as the damage only occurred to the general contractor’s work.  Reference this great articleopens in a new window in the Insurance Journal.

Business auto is a form of contractors insurance that protects against auto-related claims.  It can include coverage for passenger type vehicles, pickups, vans, dump trucks, tool trucks, and even semi-tractors.  Trailers are also covered under a business auto policy, but unlike personal insurance, they must be listed on the policy for coverage to apply.  Reference our business auto page for full details, including a list of covered auto symbols to help decrypt your insurance policy.

Coverages can include

• Liability
• Comprehensive
• Collision
• Medical
• Personal Injury Protection
• Uninsured Motorists
• Under Insured Motorists
• Lost income for key vehicles
• Drive Other Car
• Lease/Loan gap
• Towing and Labor

Workers Compensation insurance is usually a separate contractors insurance policy, but a key coverage nonetheless.  In the event of a work-related injury, it pays for the employee’s medical bills and a portion of lost wages.

Contrary to popular belief, health-related expenses are unlimited under this coverage.  The largest claim we have ever received was for workers compensation for a relatively small policy.  Limits shown on the policy are for the employer’s liability portion of the coverage which is rarely enacted.  View our workers compensation page for more detail.

Many clients run into a situation where higher limits of insurance are needed on their contractors insurance package.  It can be an insurance requirement to bid on a particular project, or simply that the business has grown to the level where extra protection is warranted.  Umbrella liability increases the limits of underlying coverages.  Umbrella liability can over top of general liability, business auto, and workers compensation.  Read More about Umbrella Insurance

Inland marine insurance is designed to cover a broad range of assets.  Generally, if items stay inside or near a building, they are insured as contents of that building.  However, coverage is reduced or removed altogether if they are moved off the premises.

With contractors, tools and equipment move around from garage to job site to job site.  Inland marine covers that exposure.  It can include:

• Contractor’s equipment not licensed for on-road use such as forklifts, skid steers, or cranes.
• Contractors tools carried in trucks or work site trailers.
• Installation equipment – items awaiting to be installed while in transit or before installation.  Examples can be cabinetry, HVAC units, or appliances.  (After installation, they are part of the structure and should be covered under builder’s risk.)

Builder’s risk insurance is meant to cover a structure being constructed or under renovation.  Buildings in such a state are subject to different risks than ones that are being used in their final capacity.  Builder’s risk covers this exposure.  It is based on 1) replacement cost at the beginning of the policy, 2) estimated replacement cost at the end of the policy, and 3) projected construction timeline.  Bankers insurance has access to arguably the best builder’s risk insurance company in the country and can insure almost anything under construction.

Property can be a part of any contractors insurance package.  Cover your shop, warehouses, storage, out buildings, contents, and even business income.  Read More about Commercial Property Insurance

When bidding larger projects for municipalities or government, the subject of bonding often arises.  A contract bond is a guarantee that the contractor has the capability, capacity, and will complete the project.  Bankers Insurance can handle your contract bonds and bid bonds with ease.  Up to $350,000 can be bonded straight from credit score.  Or complete a more thorough application and any limit is possible.

Traditional (larger) contract bonds can take time, so don’t delay applying.  Once a business is approved, subsequent bonds are much faster.  Financials are submitted to the bonding company once per year to renew status.