If you're running a renovation company, it is important to be prepared. Getting your insurance in order ahead of time can make it easier to deal with emergencies later on. What types of insurance should you get? Check out this guide to learn more about your options.
An Overview of the Most Important Renovation Company Insurance Types
If you're new to running a business, we know all the different types of insurance can seem overwhelming. However, the reality is that it doesn't have to be complicated! There are just a few basic types of insurance you need to know about.
General liability insurance for an interior renovation company
This insurance covers you in case a third party is injured due to your renovation company. It will help pay the cost of legal fees and lawsuit settlements if the injured person decides to sue you. For example, if a potential buyer tripped on an extension cord at your site, general liability insurance would cover you.
Workers' compensation insurance
In most states, this insurance is a legal requirement. It will pay the medical bills in case your employees are injured on the job. Due to the slightly higher chances of an injury while doing construction, getting this coverage is essential.
Commercial property insurance
If you purchase properties to renovate them, you need commercial property insurance. This type of insurance will cover the land, building, and potentially any tools or equipment you have. If these items are damaged, your insurance will give you the cost of repairing or replacing them.
Commercial auto insurance
Did you know your usual car policy might not cover trucks or other vehicles you use on the job? If you use automobiles for tasks like carrying renovation tools or supplies, you need commercial auto insurance. This insurance can cover repairs to your own vehicle or repairs for any vehicles you damage in an accident.
Professional liability insurance
Professional liability insurance also covers lawsuits. However, it is more specific than general liability insurance. It covers lawsuits due to errors in your professional work, which usually isn't covered under a general policy. So if a client gets mad because your renovations were faulty, this insurance can help.
Employment practices liability insurance
Employment practices liability insurance (EPLI) is another type of insurance that can cover gaps in your main general liability policy. This gives you coverage if an employee sues you because they don't like your employment practices. It can help with lawsuits related to things like a job candidate claiming discrimination or a fired employee claiming you fired them to cover up an OSHA violation.
Do You Really Need All These Types of Renovation Contractor Insurance?
When setting up your renovation company, insurance really is not something you can skip. It is very affordable, and the advantages of having it far outweigh the costs. Benefits of getting the right insurance include:
- Comply with government regulations: Depending on where you live, you might be legally required to have a certain amount of insurance. Without the right insurance for an independent contractor, you cannot get a license, so you will face fines and other consequences if you try to work.
- Avoid major financial difficulties: In the remodeling business, you are often operating on razor thin margins. Any unexpected cost can be enough to harm your business. Insurance helps cover these costs, so you are less likely to go bankrupt after a problem.
- Get bigger and better business opportunities: When you work with other professionals, they want to know they can get compensation if anything goes wrong. For most larger contracts, renovation contractor insurance is absolutely essential.
- Enjoy peace of mind: Operating your own business can be stressful, but insurance helps. With insurance, you do not have to worry that one accident or disgruntled employee will be enough to put you out of business. Instead, you can be confident that you will get financial help when you need it, so you can focus on more important aspects of your business.
Which insurance types should you get?
Of course every renovation company is different, so not every company will need every sort of insurance plan. For example, if you don't use any vehicles in your line of work, commercial auto insurance is not necessary.
Because every company is different, it's a good idea to talk to an insurance professional. They can help you find the policies that offer the most coverage without including any nonessential services.
How to Choose the Right Renovation Company Insurance Types
For all types of insurance, remember that individual policies vary. This lets you customize your policy to suit your needs. Here are some of the factors you might want to consider.
Coverage limits
The coverage limits for an insurance policy are essentially how much money the insurance company will give you. For example, if you have a general liability policy with a $500,000 limit, the company would pay up to $500,000 for a general liability lawsuit, and then you would have to cover the rest. Generally, higher coverage is helpful, but it does cost more. You usually only need to pay for it if you are a larger business, have a lot of employees, or work with expensive properties.
Insurance costs
Of course, cost is a major deciding factor in any business decision. The average renovation professional usually pays a few thousand per year for all their insurance. However, the exact price will vary quite a bit. You can sometimes save money by purchasing a remodelers insurance bundle that provides multiple types of insurance for one low cost. Some things that may increase insurance costs include:
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Picking a policy with more coverage
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Choosing a policy with low or no deductible
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Working in an area with a high cost of living
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Making multiple claims on your policies in the past
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Running a large remodeling company
Coverage type
Check to see if your renovation or construction policy is claims-made or occurrence-based. These insurance types basically refer to how long you get coverage for.
A claims-made policy protects you from lawsuits filed during the time your policy is active, so it can give you retroactive coverage on previous issues. An occurrence policy covers any claims that arise from issues that happened while your policy was active, so it can give you coverage after you quit using the policy.
Items covered
Finally, you will need to read your policy carefully to see what items are actually covered. Some policies may include helpful coverage for things like pricey construction tools. Meanwhile, others may exclude items your construction renovation company needs coverage for. To get the best coverage, make a list of everything you need coverage for and check with your agent to see if the policy covers those items.
CoverWallet Provides All Types of Renovation Company Insurance Plans
At CoverWallet, we understand the unique needs of business owners. Our team is here to help with ensuring your renovation company has the best possible insurance. We can carefully assess your situation, recommend coverage options, and provide you with affordable quotes. Contact us today to learn more.