Contracting may be one of the oldest and best-known types of businesses to run. You can start your company alone, and quickly build a team of subcontractors, general contractors, and trade contractors. Regardless of how you started, if you’re like most contractors, you have strong opinions about business insurance.
Not everyone believes insurance is useful, and some even feel it’s only good for complying with regulations. In reality, business insurance benefits contracting companies in several ways.
1. When people get hurt
People get hurt, or they claim to get hurt, every day. If a business is anywhere near, they may try to blame that business for their injuries. Someone slips on a wet floor at the laundromat and strains their back. Maybe they trip over a piece of wood at the lumbermill and break an ankle. In each case, the injured person expects the business to pay for the related medical care needed. Depending on the circumstances, fixing injuries might involve paying for hospital visits, emergency room care, or ongoing rehabilitation.
Since contractors usually work on location, they have little to no control over their work environment. This makes it easier for accidents to happen. Imagine trying to pay for these types of expenses out of pocket as a general contractor. Business insurance works for you by paying these expenses instead.
2. When property gets damaged
Property damages are another everyday risk contractors take. It also shows up in many different ways. Sometimes it’s as simple as a painter spilling paint on a tile floor, or bumping against something fragile as he moves through the house. Maybe an excavation company is digging out a new basement and accidentally damages a water pipe. Excavation contractor insurance would pay for repairing or replacing that pipe and any other associated property damages. This helps the contracting company maintain its cash flow so that it can continue moving forward with customer jobs.
3. When products are defective
Contractors use and recommend products of all types. Roofers recommend specific roofing materials. Landscapers use a favorite brand of weed killer. Pool contractors use certain brands of cleaning chemicals. The list goes on. Maybe you sell products directly, recommend specific ones to clients, or simply use them as part of the services you provide. The unfortunate truth is problems can arise. Maybe a product is recalled due to contamination at the packaging plant. Maybe a client has an allergic reaction to something. Whatever it is that goes wrong, your contracting company can be held responsible for it.
Business insurance works for contractors in these cases, to help mitigate costs associated with the problems. If your company is sued, the insurance policy will pay associated legal fees. They’ll pay for out of court settlements, or judgement fees if you’re found liable, too. These fees can add up quickly, and trying to deal with them on your own is expensive and time consuming.
4. When vehicles get damaged
As your contracting company grows, so does your crew. Your company’s fleet has likely grown with the company, but that also means its risks have too. Having vehicles on the road each day, sometimes moving between many locations, increases the likelihood of car accidents.
Business car insurance works with the company to help protect it from the financial strain caused by car accidents. Commercial coverage varies based on the policy, but this is designed to help when company vehicles are involved in accidents. The policy may pay for injuries to third parties, to your workers, and for property damages. It also may cover you in the case of an uninsured motorist causing an accident.
5. When someone objects to your advertising
Yes, this is a risk contracting companies can face. Sometimes and advertisement for your company is challenged in some way. Maybe a competitor feels you have slandered them, or maybe you’re accused of a copyright infringement. When these issues arise, business insurance will help.
Let’s say you run a roofing contracting company and you run an ad showing previous work completed. The client believes the “before” picture in your ad portrays them in a bad light, so they sue your company for defamation. Roofer insurance pays for the resulting litigation costs. If applicable, the policy may pay for a settlement or judgement as well.
Final Words
As distasteful as it may be for most of us, litigation is a daily risk when you run your own business. And contractors of all types are unfortunately common targets. Whether your company is brand new and solo operated, or up and coming with subcontractors and employees, be sure to protect it and yourself. Getting business insurance not only saves you money in the long run, but it also saves you time and frustration. Instead of having to take time away from profitable projects to defend yourself, you’re able to focus on your specialty while the insurance policy focuses on taking care of you.