Questions Contractors Should Ask Insurers About Contractors Insurance

As a contractor, securing insurance coverage like a contractors insurance is essential to help financially protect your business, manage risks and ensure project success.

Whether you’re a general contractor, subcontractor or specialty trade professional, understanding the nuances of insurance policies can make a significant difference.

Contractors should consider asking insurers a few key questions during the insurance shopping process.

By addressing these questions, you’ll be better equipped to make informed decisions and safeguard your construction projects effectively.

Four Questions Contractors Should Ask When Shopping for Insurance

The following are questions contractors should consider asking their insurer:

• How do I determine the risks associated with my project?
  Identifying the risks inherent to your scope of work is crucial. Additionally, understanding the risks specific to the industry you serve is essential. By creating a comprehensive registry of project-related risks and industry-specific risks, you can determine the appropriate insurance coverage needed. This helps allocate risk effectively and identify the necessary products for your risk management program.

• Do my contracts reflect proper risk allocation?
  Not all parties involved in the construction process have the same understanding of risks. Conducting a holistic contract review helps identify gaps in risk allocation and ensures alignment with desired insurance coverage. Clear communication about risks and their allocation among relevant parties is vital before a project begins.

• Do I need workers’ compensation if I work alone?
  Workers’ compensation may still be essential for contractors—even if they work alone. Legal requirements, coverage for self-inflicted injuries, protection against liability claims, health and safety precautions and contractual obligations all underscore the importance of having workers’ compensation coverage.

• Are the impacts of defective work covered?
  Commercial general liability policies may cover instances where the insured’s defective work causes bodily harm or damages other portions of the property—typically referred to as resultant damages. For example, if a contractor’s faulty installation of materials leads to water damage in a building, the resulting repair costs may be covered by the policy. However, commercial general liability policies are not designed to provide coverage against claims that work is inferior or defective. Contractors should consider other types of insurance, such as product liability insurance, to protect against claims related to faulty products they make or sell.

How to Secure an Insurance for Contractors in Port Orchard, WA

Consider working with an insurance broker to tailor coverage to your specific situation. Asking questions will help you make informed decisions and protect your business effectively.

Other relevant questions, such as those related to general liability, protection of tools and equipment, and project safety during construction, should be considered. Contact You Choose Insurance to help ensure you have the right coverage for your unique circumstances.

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.