The Importance of Contractors Insurance: Protecting Your Business From Risk

Running any type of business comes with a certain amount of risk, but contractors in particular face many potential hazards due to the manner of their work. Most contractors will need to enter clients’ homes or property, which always presents the risk of potentially damaging their property. In order to protect themselves and their business from costly lawsuits, contractors must obtain proper insurance coverage.  
What Is Contractor Insurance? 
Contractor insurance is a type of coverage that protects a business in case of a work-related incident. No two contractors have the same exact insurance policy because each business is unique. However, contractor policies will most likely include liability coverage and property insurance.  

What Does Contractor Insurance Cover? 
Contractors insurance policies are highly customizable but typically include the following coverages: 

• General liability insurance can help pay for losses and/or medical bills if the business causes property damage or bodily harm to a third party. 
  
• Errors and omissions insurance may help compensate a third party if professional advice or mistakes results in financial losses. 
  
• Property insurance may help compensate a business if the property is lost or damaged due to a covered incident. 
  
• Umbrella insurance provides extra protection to help cover a claim that exceeds the limits of certain liability policies. 
  
• Commercial auto insurance can help provide coverage for vehicles owned by a business. 
  
• Workers’ compensation insurance can help provide replacement income and medical benefits to employees injured or ill due to a work-related incident. 

Do I Need Contractor Insurance? 
In many places, contractor insurance is legally mandated. For example, some states require construction businesses to have a certain amount of liability insurance. It’s critical to discuss your business insurance needs with a qualified insurance provider to ensure you get the coverage and limits that meet local requirements and provide you with comprehensive protection.  

Some of the most common trades that may need contractor insurance include the following: 

• Construction 
  
• Carpenter 
  
• Plumber 
  
• Electrician 
  
• Landscaper 
  
• Painter 
  
• Handyperson 
  
• HVAC 
  
• Floor installers 
  
• Mason 

Contractor Insurance in Los Angeles, CA 
If you want a quote for contractor insurance in the Los Angeles area, contact Germani Insurance Services. We work closely with our clients to customize coverage, limits, endorsements and exclusions for each policy to fit your specific risk exposures.  

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.