Contractors’ Insurance: Key Points to Understand
Contractors’ insurance is a category of business coverage designed to protect contractors, subcontractors, and construction-related businesses from financial losses due to accidents, property damage, or legal claims. It’s not a single policy but a combination of coverages tailored to the contractor’s trade and risks. Homestead Insurance Agency provides contractors’ insurance in North Royalton, Middleburg Heights, Fairlawn, Valley City, OH, Strongsville, Litchfield, OH, and surrounding areas.
- Why It’s Important
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- Contracting work often involves high-risk activities—working at heights, using heavy equipment, or managing subcontractors. Without insurance, a single accident could lead to costly lawsuits, medical bills, or replacement costs for damaged property. Many clients also require proof of insurance before awarding a contract.
- Common Types of Coverage
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- General Liability Insurance: Covers third-party bodily injury, property damage, and related legal fees.
- Workers’ Compensation: Required in most states for businesses with employees; covers medical expenses and lost wages for injured workers.
- Commercial Auto Insurance: Protects vehicles used for work purposes.
- Builders’ Risk Insurance: Covers buildings and materials during construction against theft, fire, or vandalism.
- Professional Liability (Errors & Omissions): For design-build contractors or consultants, covering mistakes in professional services.
- Tools & Equipment Coverage: Replaces or repairs tools damaged, stolen, or lost on the job.
- Cost Factors
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- Premiums vary based on trade (e.g., electrician vs. roofer), business size, claims history, location, coverage limits, and the number of employees. High-risk trades generally pay more.
- Compliance & Contracts
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- Many states and municipalities have minimum insurance requirements for obtaining a license. Clients often demand higher limits than legally required. Always verify coverage meets contractual obligations.
- Risk Management Benefits
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- Insurance doesn’t just transfer risk—it can help secure bigger jobs, boost credibility, and provide peace of mind. Some insurers offer safety training or risk assessment services that reduce both accidents and premiums over time.
Bottom Line
The right contractors’ insurance package safeguards your livelihood, protects your crew, and reassures clients. Reviewing coverage annually—and adjusting it as your business grows—is essential for long-term stability. Let’s have a conversation! Feel free to contact us.
