Tips For Buying Contractor Insurance
General contractors play an essential role in both commercial and residential building projects, as well as renovations and remodeling buildings and homes. Many people find that a career as a general contractor is rewarding, and it can also be quite lucrative. However, working as a general contractor also comes with a lot of responsibilities, such as carrying comprehensive contractor insurance. Carrying valid insurance is typically a requirement of holding a contractor's license issued by your state, and it is essential to always keep your contractor insurance valid and up to date. If you are a new general contractor, use the following tips to purchase contractor insurance:
Understand the Type of Insurance Coverage You Need
Before you begin shopping for contractor insurance, it is important to understand the type of coverage that you need. An essential part of contractor insurance is general liability coverage. General liability coverage provides protection in the event that property is damaged during a project you are working on. For example, if you are working on a project that consists of building an addition on a home and you accidentally cause extensive damage during the building process, you can file an insurance claim to cover the cost of repairs. You will also need workers' compensation insurance coverage. This type of insurance protects you in the event that you are injured on the job. If you have employees, they will need to be covered too.
The cost of carrying contractor insurance can be a big expense for a general contractor, so it is always in your best interest to shop around before purchasing a policy. When you begin requesting quotes, make sure that each quote is for a policy that has the same coverage so you can compare accordingly. When it comes to the price of contractor insurance, you will also need to consider the deductible on your policy. The higher the deductible, the lower your premiums will be.
Make Sure You Understand Your Policy
Prior to purchasing a contractor insurance policy, it is extremely important that you understand the terms and conditions. Take the time to read the policy documents, or work with an experienced insurance broker who can explain the policy and answer your questions. Your contractor insurance is a major financial safety net, so it is essential to have a policy that provides the coverage that you need while operating your contracting business.