If you’re a small contractor, whether in carpentry, electrical work, or plumbing, your business faces occurrences every day. From job site accidents to property damage, the right insurance coverage isn’t just a safety net; it’s essential for protecting your livelihood. Serving specialty contractors, Muller Insurance provides a wide range of helpful insurance policies from more than 20 leading insurance companies. Here, we explain what contractor insurance is, what it covers (and doesn’t), and why it’s important.
What Is Contractor Insurance?
Contractor insurance is essential for protecting professionals in skilled trades from the unique risks they face on the job. It is not a singular policy, but rather a package of different policies that help protect contractors from financial losses.
It helps shield your business from costly lawsuits related to accidents or damage and ensures financial security if unexpected incidents occur while on the job. Having contractor insurance also helps build client trust by demonstrating professionalism and compliance. Many regions require contractor insurance to meet licensing and regulatory requirements.
If your business involves physical labor, specialized tools, or client property, contractor insurance is crucial for both financial protection and business growth.
What Does Contractor Insurance Cover?
As contractor insurance isn’t a single policy, there are different types of coverage that can be added to protect contractors and contracting businesses from a wide variety of risks. Some of the most common types of policies included in contractor insurance include:
- General liability insurance: This covers third-party bodily injury, property damage, and legal defense costs if your work results in harm or damage to others.
- Workers’ compensation: This provides medical benefits and wage replacement for employees who are injured on the job. This coverage is often required by law for contractors.
- Commercial auto insurance: This protects vehicles used for business purposes against accidents, theft, and liability claims, ensuring your work trucks and vans are covered.
- Tools and equipment coverage: This helps pay for repair or replacement if your tools or equipment are stolen, damaged, or lost, helping you get back to work quickly.
- Professional liability insurance: Also known as errors and omissions, this coverage protects against claims of negligence or mistakes in your professional services that result in financial loss for your clients.
What’s Not Covered by Contractor Insurance?
While contractor insurance provides broad protection for contracting businesses, it does not cover every risk. Understanding these common exclusions helps you avoid costly surprises and plan for supplemental coverage when necessary:
- Intentional damage is never covered; any harm caused deliberately by you or your employees will be excluded from coverage.
- Losses from employee theft are not included in standard contractor insurance and typically require separate fidelity or crime insurance.
- Wear and tear or normal deterioration of tools, equipment, or property is excluded from most contractor insurance policies.
- Faulty workmanship or defects in your services are generally not covered unless you purchase specific endorsements or additional coverage.
Each insurance provider has unique policy terms and exclusions. Carefully reviewing your contractor insurance policy ensures you fully understand what is covered and what is not. This allows you to fill coverage gaps with additional protection, keeping your business secure.
Key Risks Contractors Need Protection Against
Contractors face unique challenges on every job site, and without the right insurance, these risks can lead to setbacks. Here are the most common threats contractor insurance helps mitigate:
- Bodily injury claims: Accidents happen, whether it’s a client slipping on-site or a passerby injured near your work area. Liability coverage protects you from medical costs and lawsuits.
- Property damage: Mistakes or accidents can damage a client’s property or neighboring structures. Insurance ensures you’re not paying out of pocket for repairs or replacements.
- Employee injuries: Construction and trade work are high-risk professions. Workers’ compensation covers medical expenses and lost wages for injured employees.
- Equipment loss or theft: Tools and machinery are essential for your business. Coverage for stolen or damaged equipment keeps projects on track without unexpected expenses.
Why Work with an Independent Insurance Agent like Muller Insurance?
Choosing the right contractor insurance can be simplified by partnering with an independent insurance agent who makes the process easier and more cost-effective. There are many advantages to working with independent agents like Muller Insurance, including:
- Access to multiple insurers and policies: We shop across top carriers like Farmers Mutual, Amtrust, Franklin Mutual Insurance, and Cumberland Mutual to find the best coverage and rates for your specific trade.
- Cost savings through bundling: By combining policies like general liability, commercial auto, and tools coverage, we can help you save money without sacrificing protection.
- Tailored policies for your trade: Every contracting business is different. As independent agents, we understand the unique risks of construction, HVAC, electrical, plumbing, and more, tailoring coverage to your needs.
Protecting your contracting business starts with the right partner. At Muller Insurance, we work with top carriers to deliver tailored coverage at competitive rates. It’s important to note that we only insure specialty contractors like plumbers, electricians, masonry contractors, and carpenters, and we do not offer policies for general contractors. We are licensed in over 20 states, including New York, Connecticut, and Pennsylvania. Contact us today or get a free quote to learn more about contractor insurance and how it can safeguard your small business.
