As a construction contractor, your business is required to carry certain insurance policies to protect your customer. You will always be required to carry General Liability, Worker's Compensation, and a variety of bonds depending upon the project. Certainly, it's important that you protect the interests of your customers, but more importantly, it's important that you protect the interests of your business since basic coverage only goes so far and there are risks you need to be concerned about and take the necessary steps to mitigate them:
Subcontractor Default Insurance (SDI)
A very good alternative to an expensive performance bond, SDI protects your financial interest if a subcontractor quits on you and your company is left spending additional resources to replace them or cover for them. An SDI policy lets you work with any subcontractor you deem reliable and qualified rather than a bonding company checking them out professionally and financially before a bond will be issued.
General Contractors are licensed professionals who enter into contracts with their customer and also offer professional advice regarding the project they plan to manage. The only insurance that will protect you and your business from an action resulting from a breach of contract or advice that results in a financial loss is Professional Liability. The insurance policy will provide coverage for defense costs, settlement fees, and judgments awarded by the court. Even if an action is considered frivolous, there will be a response from an experienced attorney provided and paid for by the insurer.
Many contractors during the course of a project will be dealing with hazardous chemicals that must be stored and disposed of in a proper manner. Should something go wrong, the fines could be financially devastating for the contractor. Since most Commercial General Liability policies have exclusions for pollution losses, your company will need to find a contractor's program that will offer this coverage to protect you and your company.
Inland Marine (equipment floater)
Typically, a contractor working multiple jobs at multiple locations will have valuable equipment spread out miles apart and in many cases, left at the job sites overnight. Contractors should look to the Inland Marine policy to cover expensive equipment and hand tools in the event of a covered peril such as theft or fire damage. Most inland marine policies will provide coverage on a worldwide basis and equipment can be scheduled or covered on a blanket basis.
Typically offered by endorsement, Installation Coverage is used to protect the contractor while building products and equipment are in the contractor's care, custody, and control during a project. For example, if you are responsible for ordering equipment such as windows, doors, ceiling tiles, and HVAC units during a construction project, these building products can be insured while they are being stored until the time of installation. This coverage is usually offered on a per project or blanket basis.
Don't put your business at financial risk; call us today and make certain that your contracting business is appropriately insured.