It’s very important to protect your business and your clients from risks on the job site.
If you don’t have enough of the right coverage, and something goes wrong, your business could be over before takeoff.
So much about insurance, really depends on the type of contracting business that you own, the services you offer, and how things and people need to be covered.
But, don’t worry about that for now. More to come a little later. Let’s get into the basics because that’s why we’re here isn’t it?
No matter your business type, services offered, and/or number of employees; no matter the state, time zone, and/or hours of operation; no matter how big or how small your business is, the following coverages are essential when considering protecting your business.
This is also known as Commercial Liability Protection against liability claims for bodily injury and property damage arising out of premises, operations, products, and completed operations. Coverage also extends to advertising and personal injury.
Is protection against an auto accident caused by you. Provides coverage for the bodily injury and property damage you cause to someone else due to your negligence while operating a covered auto)
Protects your commercial/business property against damage.
What about Workers Compensation Insurance?
In the state of Missouri, you are required to purchase worker’s compensation insurance if you have at 5 or more employees. This coverage provides medical and/or lost time coverage for employees that are injured while in the course and scope of employment. However, if you own a construction business, you have to carry worker’s compensation insurance if you have at least 1 employee.
In Missouri, the following coverage is required for all contractors:
- General Liability
- Tools & Equipment Coverage also known as BOP
- Employee Coverage also known as Worker’s Compensation
- Business Vehicle Insurance
- Bond (guarantees your construction services. This coverage will pay for any fees that you get if you happen to break a contract by not providing the services you agreed to.)
Some other options to consider in Missouri are:
Professional Liability also known as Errors and Omissions/E&O
Protects your business from legal issues resulting from an employee’s mistake that causes the customer to take a loss.
Employment Practices Liability also known as EPLI
Protects your company from lawsuits filed by employees such as; sexual harassment, discrimination, negligence, slander, breach of contract, invasion of privacy, mental and/or emotional damage, and wrongful termination.
Excess Liability also known as Umbrella insurance
This policy extends your coverage. Example: you have a general liability policy that covers up to $100k for each occurrence. You have an at fault general liability claim worth $200k. You have an umbrella policy with $100k in coverage. Your claim can be covered using both your general liability limit and your umbrella limits if you purchased the umbrella policy to extend the coverage you purchased for general liability.
An insurance policy for your business not only covers damages associated with your covered loss; it also protects you from the expenses associated with out-of-court settlements, court/litigation costs, and judgements awarded by the courts. When hired for work, most client’s will request a Certificate of Insurance and/or a Declarations Page to verify your coverage, whether required by the state or not.
Certificate of Insurance
A document issued by an insurance company/licensed broker/licensed agent. It is used to verify the existence of insurance coverage. More specifically, the document lists the effective date of the policy, the type of insurance coverage purchased (auto, work comp, general liability), and the types and dollar amount of applicable liability ($1M general liability, $500k auto, $2M umbrella). A certificate of insurance is often needed in situations where liability and large losses are a concern.
The front page of your insurance policy. It specifies the named insured, address, policy period, location of premises, policy limits, and other key information such as year, make, and model of vehicles covered under that policy.
Example of Liability Claim
Let’s say you’re a General Contractor hired to install a sink in the bathroom. On day 1 of the job, you notice a leak. In an attempt to find where it’s coming from, you accidentally create a faster leak. What now?
A plumber can help but your coverage doesn’t extend to your plumber. You’ll need to hire a plumber and make sure that your plumber is properly insured.
You can do that by requesting a certificate of insurance and/or their declarations page.
Most policies will not extend to other independent general contractors even if you hire them for a job. Because that contractor is not your employee, he/she will need to have their own policy with the required coverage.
Here’s an example of what an Independent Plumber should have for adequate coverages:
- General Liability $1M, including bodily injury and property damage.
- Auto Liability $1M.
- Surety Bond $10K.
- Workers Compensation and Employer’s Liability (if he/she has employees).
Which insurance company is the best for Contractors in Missouri?
Now that you have a general understanding of the coverage that you may need for your business, here are a couple of insurance companies that you may want to keep in mind when discussing your choices with your agent.
Mid Rivers Insurance Group
Coverage that meets the needs of the following kinds of Contractor’s:
- General contractors
- HVAC contractors
- Maid and janitorial services
Both offer a broad range of coverage including, but not limited to:
- General Liability
- Workers Compensation
- Property Damage
- Loss of Income
- Commercial vehicle
- Builder’s Risk
- Heavy machinery and equipment
It’s important to meet all standards, needs, and requirements for; state, industry, and business.
If not, then you’re not giving your business the best chance to succeed now, or in the future.
There are a lot options and I’m eager to help you protect your business! Let’s get started by answer a few of the specific questions you might have about your contracting business.