Starting a contracting service takes plenty of research, investment, and work. Part of your research should include learning about the different nuances involved with contractor insurance. Let’s talk about these nuances in detail.
Here are six important things to know before you sign up for an insurance policy.
You should be aware of specific risks that affect your contracting business. The purpose of business insurance is to offset risks with coverage that pays for damage, mistakes, and accidents. Make sure you are clear on the specific policy you have thoroughly reviewed. The best way to clarify policy features and limits is to talk with an experienced insurance professional.
Never pick an insurance provider randomly, as each provider has its own way of writing policies and setting rates. No given contractor insurance policy fits the needs of all contractors. So makes sure it's an insurer that's been in business for many years and has earned a good reputation among contractors in your community.
It's understandable that many small businesses need to conserve capital and cut spending costs in various ways. When it comes to contractor insurance, however, it's a good idea not to cut corners. Get the insurance coverage that's appropriate for your business, and remember that it functions as a financial safety net.
Some people may assume all business losses are covered in standard business insurance policies, but that's unfortunately not the case. Every policy has its own specifications with the state's insurance laws. Many times coverage is contingent upon the result of specific, not general, disasters. So before you sign a policy, make sure you understand its coverage limits, exclusions, and extensions.
The deductible is the amount you pay to activate an insurance claim. In other words, before your provider sends you a reimbursement check to pay for damages, you must pay a certain amount. Deductibles commonly cost $500 but can be adjusted based on your budget and risks. If you raise your deductible, it will lower your monthly insurance costs.
It's better to pay for too much coverage than lack the essential coverage you need. In the contracting business, there's often a risk that a third party may be injured or suffer financial loss from the impact of a contractor's work. Be aware that lawsuits can come from unexpected places, especially if someone is injured at your job site or if someone's property is damaged.
Your experience in the industry and talking with colleagues will help guide you in setting appropriate coverage limits. Remember, there are various choices for contractor insurance, so it helps to first discuss your business model with an insurance expert who can explain your options.
Becoming a contractor is challenging enough as it is. Getting the right customized insurance policy for your business will make things go more smoothly. If you would like to learn more about our contractor policies, contact the experts at Fuller Insurance Agency, and we will be happy to help you.
