You contractor insurance policy is there to protect your business when things don’t go as planned. Injuries, property damage, and mistakes are already unpleasant to deal with, and without insurance, these kinds of things can put a contractor completely out of business.
While a good insurance policy helps you mitigate a lot of risk, it’s also one of many business expenses that you want to keep as low as possible.
When you purchase your policy, you hope you’re never going to need to use it. That makes it tempting to cut corners to save money, because if things go well, you’ll never have to file a claim anyway. However, that kind of thinking is an expensive mistake – if something does happen and you need your insurance, but find out you don’t have enough coverage, all those insurance premiums are suddenly a lot less of a deal.
Small mistakes can add up to big expenses later. Here’s what you should look out for:
All contractor insurance policies have exclusions, and you should know what they are before you purchase your coverage.
Policy exceptions define specific circumstances under which you’re not covered by your insurance. Sometimes, the exclusions cut out unnecessary stuff that you’d never need, thereby saving you some money on your premiums. Some exceptions might apply to your job, though, and leave you under-insured.
Sit down with your insurance agent and make sure you read your entire contract. That’s good advice in general, of course. Just take a little bit of extra time to go over and understand all your exceptions.
If any exceptions might leave you without important coverage, your agent can help you find a better policy or select different options.
Fortunately, you haven’t needed to file a claim over the last year, and now it’s time to renew. Your policy (that you haven’t used) has been great, so why not just renew it and move on? After all, there are enough demands on your time already without going through the insurance shopping process again.
You might not realize how much your business has changed over the last year. Things happen gradually, and without even realizing it, you can outgrow your insurance plan.
Each year when renewal time rolls around, sit back down with your agent to make sure you have all the coverage you need. Your agent can also point out any places you might be overspending or missing out on deals.
Subcontractors on your job site aren’t covered by your contractors insurance policy – they need to purchase their own insurance policies.
As the contractor in charge, it’s up to you to make sure that all your subcontractors on site are properly insured. Get the appropriate proofs of insurance before you let that subcontractor begin work, as an uninsured subcontractor can cause a world of trouble if anything goes wrong.
Getting the most from your contractor insurance
Your policy is there as a safety net, and if you ever fall, it should definitely be able to support you.
At the same time, you need an affordable policy so that you can stay covered without spending all your profits on premiums.
Finding that balance between low premiums and appropriate coverage can feel daunting, but with the help of a good agent, it’s much easier. Even without an agent, you can get the right plan at the right price. Just be sure to read your entire contract and consider your coverage needs carefully.