Typically a Contractors liability exposure for their work is high, and it doesn’t stop the day the Contractor finishes the job. Liability issues could be arise years later. A faulty pipe connection could give way and result in water damage 12 months after the job is done. A faulty wiring connection could cause a house to burn down 5 years after the electrical work is completed. A child could wander into a construction zone and get injured while playing with construction materials. The examples of what could wrong are endless.

Because of these risks like these, Contractor Insurance is employed to protect the business operations of the Contractor from unexpected litigation and lawsuits arising from Bodily Injury or Property Damage.

First, in order to do business at all, a Contractor bond is needed. A Contractors Bond can be purchased for a fee, the cost of which depends on the credit of the Contractor applying for it. A bond acts as "financial assurance" that the Contractor will complete a job to satisfaction. A bond may also cover things like unpaid subcontractors or suppliers, damage to the property due to the construction or crew, and lost or stolen materials from the job site.

When the operations get big enough to need subcontractors, General Contractor Insurance may include higher Contractor liability insurance limits of $1 million, $2 million or more. A growing operation may even benefit from wrap insurance as General Contractors insurance needs expand to cover larger and larger projects such as the building of condominiums, apartments or strip malls.

Insurance for Contractors doesn’t have to be complicated, but for most of us insurance just is.  Make sure you ask questions of your Broker to help make certain the Contractor’s insurance you’re buying fits the current and future needs of your contracting business. Though changes to policies called “endorsements” may be able to modify some coverage’s during the policy, there’s no substitute for buying insurance protection that can grow with you from the start.

As both you and your Broker share responsibility for finding the right Contractor Insurance Liability, choose a Broker that knows what they’re doing and can confidently explain the features and benefits of the Contractors insurance policy they’re recommending. Insurance is a competitive business just like any other, so a Broker that can shop your needs with multiple insurance carriers and return to you the best of what they’ve found may prove to be very valuable.

Knowing that you have acquired the right Contractor liability can go a long way in adding peace of mind to your business now and in the future.