In today’s corporate world, many companies rely on assistance not simply from employees but also from independent business contractors. These types of workers, who are often hired for just a few months or a year, are generally ineligible for benefits such as medical or dental insurance and 401k and retirement plans. However, contractors who work in industries such as construction, plumbing, and electrical work are especially prone to injuries and other risks due to the equipment, tasks, and environments associated with these fields. Therefore, it is important for them to have some form of protection. Which brings the question, what type of insurance do contractors need?
Why Do Contractors Need Insurance?
In construction and other similar industries, contractors are often as responsible as full-time employees for preventing accidents and meeting deadlines for both small and large-scale projects. If you are a contractor and an accident results in damage to your company’s business records or property, you may benefit significantly from a special type of insurance policy.
The Benefits Of A Contractor’s Insurance Policy
A contractor’s insurance policy carries three notable benefits: it shields you against risk, it helps to protect equipment, and it offers liability coverage. Here is a close look at each of these three advantages.
Shield Against Risk
Organizations across all industries face varying levels of risk, and it is important for them to have strategies in place to combat incidents of risk that affect all workers, including contractors. A contractor liability insurance policy can help shield you when an unanticipated setback – such as a lawsuit or a heavy financial loss – occurs.
According to a Current Population Survey conducted by the Bureau of Labor Statistics, 568 of the 662 fatal occupational injuries in 2016 (85.8%) occurred among independent contractors. In 2017, contractors accounted for 516 of the 613 fatalities (84%). Additionally, of the 1,275 independent workers who died in the United States in 2016-17, 79 were construction workers and 95 were first-line supervisors of construction trades. Evidently, independent contractors must be shielded from risk.
In addition to shielding you from risk, a contractor liability insurance policy also helps protect any equipment you regularly utilize for work. This may include tools such as drills and hammers, large machinery such as forklifts and bulldozers, and other resources such as electrical contractor software. Equipment of virtually any kind can break down for several different reasons, and it is important to have some form of protection for it. Be sure to inquire exactly what type of equipment your contractor insurance policy covers, as some policies may have restrictions on such coverage.
A general liability insurance policy will help shield a contracting company against lawsuits that arise from either property damage or injuries. Claims of defamation (libel and slander) are also typically covered under a general liability policy. However, a general liability policy will not provide coverage for professional errors and omissions. Liability insurance policies can have varying limits and deductibles, depending on the amount of risk that your organization estimates to face while performing routine business operations. The level of liability your business faces will depend on multiple factors, including the industry it is in, the number of workers it hires, and its revenue (i.e. sales volume).
Ultimately, it is essential for you to evaluate your needs and concerns as a contractor before selecting a liability insurance policy. It is also important to note that some states legally require contractors in certain industries (e.g. construction) to purchase some form of liability insurance. Many states also have licensing requirements for construction contractors. Be sure to remain informed about your state’s laws on this subject.
Talk To A Contractor’s Insurance Expert
Reach out to the professionals at John M. Glover Insurance Agency in Norwalk, Connecticut for more information on insurance options for contractors and why they are beneficial. Since our founding in 1916, we have been dedicated to serving the needs of clients located throughout Connecticut, New Jersey, New York, Massachusetts, and Hawaii. As an independent agency, we work closely with several major insurance companies that are known for their stability and reliability.
At JMG, we understand the unique risks associated with several different types of professions. Therefore, we are always prepared to provide clients with insurance solutions that address their concerns. Our more specific options include plans to protect workers such as carpenters, riggers, environmental workers, and street and highway workers. We can also offer coverage to major corporations such as international crane and tug operations.
Regardless of the industry you perform contract work in, we are committed to helping you avoid paying significant out-of-pocket costs for unexpected risks. Call JMG Insurance Agency today at (844) 304-7332 or contact us online to receive a free quote.