Insurance for Other Contractors
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What Insurance Do Other Contractors Need?
Professional Liability Insurance (or E&O Insurance), protects your small business from claims of mistakes, negligence or malpractice made when providing your services that caused sobody financial loss. PLI covers your legal defense costs, damages and settlements.
General Liability Insurance protects your small business against claims of third-party bodily injury and property damage, reputational harm and advertising injury. It covers medical bills, repair costs & legal fees.
A Fiduciary Bond (or Surety Bond) protects a fiduciary - someone who is granted power over another person’s interests or assets via a will or contract - from being sued for alleged fraud, embezzlement, or dishonest acts.
Workers Compensation covers your employees' medical costs and lost wages while recovering from a work-related injury or illness. The employee gives up the right to sue your company in return for receiving cash and benefits from Workers Compensation. In some states it’s mandatory for businesses!
Frequently Asked Questions
Why do Contractors need insurance?
Companies in this industry provide contracting services for heavy construction and engineering projects, civil engineering projects, building equipment installation, glass-related work, and exterior construction. Businesses may also specialize in the rehabilitation and repair of these areas.
Contractors bear the risks and responsibilities of making sure that a project meets the expectations of their clients. But unexpected things do happen and when they do, you must make sure that your business is protected with insurance. Insurance covers the costs of lawsuits, medical fees, and other expenses so you don't have to pay out of your pocket. You simply need to pay a small monthly fee.
What risks do Contractors face?
Below are some risks contractors can face:
- You made an unbalanced bid where the overhead cost is more than the estimated price of the project. This will cost your client money, and they may sue your business for their losses.
- Your employee is injured while working on a project. Since you are the employer, you'll be responsible for medical expenses and could face charges if your business is sued in court.
- Your business failed to meet the expectations of your client, forcing your business with the client to end prematurely.
How much does insurance for Contractors cost?
The cost of insurance for contractors usually relies on the size of the business the coverage needed. Without taking these into account, below is the average cost of insurance policies for your business:
- General Liability costs $500 in annual premiums.
- Professional Liability insurance costs $600 in annual premiums.