Whether you’re an electrician, plumber, carpenter, roofer, HVAC technician, general contractor, or another type of tradesperson, running a contracting business comes with risks that go beyond the work itself.
A customer could be injured on a job site. Your tools could be stolen from your vehicle. You could accidentally damage a customer’s property. An employee could get hurt while working. Even a simple mistake could lead to a costly dispute.
Having the right insurance can help protect your business from many of these unexpected situations.
At Link-Hellmuth Insurance, we help contractors and small business owners understand their insurance options and choose coverage based on the type of work they do. If you’re looking for business insurance in Springfield, OH, we’re here to help you understand what coverage your contracting business may need.
General Liability Insurance for Contractors
General liability insurance is one of the most important types of coverage for many contractors.
It can help protect your business if you’re held responsible for causing bodily injury or property damage to someone else. For example, imagine you’re installing a new fixture in a customer’s home and accidentally damage a wall or flooring. Or a customer trips over equipment you left at a job site and is injured.
These situations can result in medical bills, repair costs, legal expenses, or other financial losses.
General liability insurance can provide protection against certain covered claims, subject to the terms, conditions, exclusions, and limits of your policy.
For contractors, liability coverage isn’t simply about protecting your business from a lawsuit. It’s about having financial protection when something goes wrong while you’re doing the work your customers hired you to do.
Do Contractors Need Commercial Auto Insurance?
If you use a vehicle for your contracting business, your personal auto insurance may not provide the coverage you need.
Contractors frequently use trucks, vans, or other vehicles to transport tools, equipment, materials, and employees. If the vehicle is primarily being used for business purposes, it’s important to make sure your policy is designed for that use.
Commercial auto insurance can provide coverage for vehicles used in connection with your business, depending on the policy.
For example, a contractor may use a pickup truck to travel between job sites and transport equipment. If that vehicle is involved in an accident, having the appropriate commercial auto coverage can be important to protecting the business.
Before purchasing a vehicle for your contracting business, talk with us about how you plan to use it. We can help you determine what type of auto coverage may be appropriate.
What About Tools and Equipment?
Contractors often carry thousands of dollars’ worth of tools and equipment from one job to another.
Power tools, ladders, generators, specialty equipment, and other items can represent a significant investment in your business. Unfortunately, they’re also vulnerable to theft, fire, accidents, and other types of damage.
Depending on your situation, you may need coverage for business property, tools, and equipment.
It’s important to understand exactly what your policy covers, where coverage applies, and whether certain equipment has specific limitations.
For example, coverage for tools kept at your business location may work differently from coverage for tools transported between job sites or stored in a vehicle.
We’ll help you look at how your business actually operates so you can identify potential gaps before you need to file a claim.
Do Contractors Need Workers’ Compensation Insurance in Ohio?
If you have employees, workers’ compensation is another important consideration.
Ohio employers generally have responsibilities related to workers’ compensation coverage, and requirements can depend on how your business is structured and whether you have employees.
Contracting work can involve physical labor, power tools, ladders, heavy materials, and other hazards, making workplace injuries an important concern.
Workers’ compensation is designed to provide benefits for covered workplace injuries and illnesses while also helping employers meet their legal obligations.
If you’re hiring your first employee or growing your contracting business, it’s important to understand your workers’ compensation responsibilities before your employees begin working.
We can help you identify the insurance questions you should be asking as your business grows.
What If You Hire Subcontractors?
Many contractors work with subcontractors on larger projects. This can make it possible to take on more work, but it also creates additional insurance considerations.
Before hiring a subcontractor, you may want to verify that they carry appropriate insurance for the work they’re performing. Depending on the arrangement, you may also need documentation such as a certificate of insurance.
The details matter because simply calling someone a “subcontractor” doesn’t automatically eliminate your business’s potential exposure.
Your contracts, the work being performed, and the insurance carried by each party can all affect how a claim is handled.
If subcontractors are an important part of your business, talk with us about how your insurance should account for those relationships.
Do Contractors Need Professional Liability Insurance?
General liability insurance and professional liability insurance address different types of risks.
General liability generally focuses on things such as bodily injury and property damage. Professional liability, sometimes called errors and omissions insurance, can address certain claims related to professional services, mistakes, or failures to perform as promised.
Not every contractor will need professional liability coverage. However, it may be worth discussing depending on the type of services you provide.
For example, contractors who provide design, consulting, planning, engineering, or other professional services may have different exposures than someone whose business primarily involves physical construction work.
The type of work you perform should help determine what coverage you need.
What About a Contractor’s Business Property?
Your contracting business may have more property than you realize.
In addition to tools and equipment, you may have office furniture, computers, inventory, building materials, supplies, or other business property.
Depending on how your business is structured and where property is stored, commercial property coverage may be appropriate.
If you operate your business from a garage, workshop, office, or other location, let us know. We can help you look at the different types of property your business owns and how it is being used.
Insurance Requirements Can Depend on the Job
Contractors may also encounter insurance requirements from customers, general contractors, property owners, municipalities, or other organizations.
For example, a customer may require you to carry a specific amount of liability insurance before allowing you to begin a project. A general contractor may require subcontractors to provide proof of insurance.
These requirements can vary from one project to another.
That’s why it’s important to understand your policy limits and have documentation readily available when a customer or contractor asks for proof of coverage.
If you’re regularly bidding on new projects, reviewing your insurance before accepting a job can help you avoid discovering that you don’t meet a particular project’s requirements.
Don’t Choose Coverage Based Only on Price
When you’re running a small contracting business, keeping expenses under control is important. But choosing insurance based solely on the lowest premium can create problems if the policy doesn’t provide the protection your business actually needs.
A policy with lower limits or fewer coverages may cost less upfront but could leave your business exposed to significant expenses after a covered loss.
The right insurance plan should take into account the type of work you perform, the size of your business, your employees, vehicles, tools, equipment, contracts, and other factors.
Our goal at Link-Hellmuth Insurance is to help you understand what you’re paying for and why certain coverages may be important for your business.
Common Insurance Mistakes Contractors Should Avoid
Contractors are busy. You’re focused on completing jobs, keeping customers happy, managing employees, and growing your business. Insurance can easily become something you only think about when your policy renews.
However, there are several situations that should prompt you to review your coverage.
These include:
- Starting a new type of contracting work
- Hiring your first employee
- Purchasing a new business vehicle
- Buying expensive tools or equipment
- Moving into a new office or shop
- Taking on larger or more complex projects
- Hiring subcontractors
- Adding a new owner or partner
- Expanding into a new service area
Any significant change in your business can potentially change your insurance needs.
We’ve previously discussed why contractors and freelancers should have business insurance, including some of the risks that independent tradespeople face. Reviewing that information alongside your current policy can help you identify areas you may want to discuss with your insurance agent.
How Much Insurance Does a Contractor Need?
There isn’t one universal amount of insurance that’s right for every contractor.
A small handyman business operating with one vehicle and a limited amount of equipment will have different needs than a construction company with multiple employees, commercial vehicles, expensive equipment, and several active job sites.
Your coverage limits should reflect the potential risks associated with your business.
We can help you look at factors such as the size of your business, the type of work you perform, your annual revenue, your employees, your vehicles, and the requirements of the customers and contracts you work with.
It’s also important to review your coverage as your business grows. The policy that made sense when you started may not provide the same level of protection several years later.
How Link-Hellmuth Insurance Can Help Contractors
At Link-Hellmuth Insurance, we understand that no two contracting businesses are exactly alike.
That’s why we don’t believe in treating every contractor’s insurance needs the same way. A roofer, electrician, landscaper, plumber, and general contractor can face very different risks, even though they’re all considered contractors.
Our team can help you review your business operations and identify the types of insurance that may be appropriate for your situation. We can also help you understand your coverage, policy limits, and potential gaps so you can make informed decisions about protecting your business.
If you’re looking for business insurance in Springfield, OH, we’d be happy to talk through your options.
Protect Your Contracting Business Before You Need It
Running a contracting business takes hard work, experience, and dedication. You’ve invested time and money into building your business, and the right insurance can help protect that investment when unexpected situations arise.
From general liability and commercial auto to workers’ compensation, tools and equipment coverage, and other specialized policies, the insurance you need will depend on how your business operates.
If you’re starting a contracting business, taking on new types of work, hiring employees, or simply wondering whether your current coverage is still adequate, now is a good time to review your policy.
At Link-Hellmuth Insurance, we’re here to help contractors throughout Springfield and the surrounding communities understand their coverage and find insurance solutions that fit their businesses.
Contact us today to discuss your business insurance in Springfield, OH and make sure your contracting business is prepared for the unexpected.