As a contractor and small business owner or manager, it can be hard to find straightforward, budget-friendly liability insurance.
Many contractors don’t know what to expect from liability insurance, even though they know they need it. The cost can be surprising, the risks that factor into the expense may not be fully understood, and the process of actually getting a policy isn’t always transparent.
So what can you expect when looking for liability insurance for contractors? Start by setting realistic expectations to help prepare you for this necessary investment that will give you peace of mind and allow you to focus on your business.
A comprehensive liability insurance policy will cover every person and scenario that could incur unnecessary financial damages to your business. These three types of insurance are a good foundation for contractors, with commercial auto and builder’s risk insurance good add-ons, depending on your situation.
“There are over eight million small businesses in the U.S. All have one thing in common: Without the right insurance coverage, each could be wiped out by a disaster or a lawsuit.” - Insurance Information Institute
With the median price for general liability policies resting at around $1,000 per year, it’s safe to say that insurance policies might cost more than you were expecting. This is especially true when you add in other policies, like safety programs. Insurance costs vary depending on the nature of your contracting work, but if you bundle your policies your monthly or yearly total can be more flexible.
Additionally, many contractors may be flat-out denied for specific policies or quoted a price so high it isn’t even worth considering. Working as a contractor often comes with inherent risk, particularly if you operate heavy equipment or work on top of buildings. This risk affects your insurability. Low insurability can make insurance companies feel hesitant to offer you a policy at a rate that won’t put your business under.
Between high prices and hesitant insurance providers, how do you find the policy you’re looking for without all the frustration?
Getting a better insurance policy is possible without the headache of reworking the budget or opting for a cheaper plan that doesn’t provide enough coverage. You need to know what to realistically expect from an insurance plan so you’ll know what to look for without being surprised.
Before you ask for quotes, make a list based on your day-to-day operations, whether you’re a roofer, a tree service, or a house builder. What risk do you bring to the table when asking an insurance company to sell you a policy? What assets do you need protection for? Do you rent a power washer, ladder, lawn mower or, truck?
Once you understand the risk you pose, you can request quotes. Ask for quotes from several providers to compare them and decide which plan is best for you.
Remember to also ask insurance providers about payment plans. Some may require a full year of payment upfront, while others offer payment plans like paying lower amounts upfront or paying month to month. Depending on the carrier you choose, your insurance broker may also be able to apply for premium financing.
The right payment plan can help with the financial burden of contractor insurance. Don’t be shy about discussing your financial needs with potential insurance providers to get the best deal.
Doing research can pay off for smaller contracting businesses. Your insurance needs may not be as complex as those of your larger competition. For bigger businesses, some research can be a good source of foundational information. However, you’ll unlikely learn everything you need to know without speaking to an insurance expert.
If you’re a larger business, don’t hesitate to call insurance experts like those at CoverHound for personalized advice on your insurance needs.
Obtaining the best insurance policy can be a lot of work, but nothing is sweeter than the peace of mind that comes with protecting the business you work so hard for.
When looking for liability insurance, you should expect strong coverage encompassing all critical components: workers’ compensation, general liability, and surety bonds. You should also expect to budget according to how risky your work is, take the time to understand your exposure, and research your options.
You may run into obstacles on the way to getting liability insurance for contractors. But if budget or insurability keeps you from the coverage you deserve, CoverHound is here for you. With personalized insurance options from top-rated carriers nationwide, we provide fast, reliable solutions to the most complex contractor insurance issues.
Life happens – getting liability insurance for contractors ensures you don’t miss a beat. Take this less than five-minute assessment to learn what type of insurance coverage you need!
Insurance shopping simplified
Insurance shopping simplified