7 Tips to Put Your Contractor Insurance to Work for You

It’s time for your contractor insurance policies to roll up their sleeves, pull on the work gloves, and really get to work. With these tips, you can get the most out of your insurance, save on your premiums, and patch up any holes that may be lurking in unread clauses in your coverage.

#1. Get More Out of Your General Liability Coverage

Did you know that you may be able to add an endorsement to your general liability policy to cover you for faulty workmanship claims? In the past, contractors had very few options to protect themselves if their completed work or work process led to a claim. Liability policies generally contain specific clauses that exclude coverage for faulty workmanship. But thanks to a unique Faulty Workmanship endorsement available for select general liability policies, offering contractors up to $10,000 in coverage for these claims. The best part? Faulty workmanship protection can be added to your policy at a price so affordable, you’d be silly to pass it up.

#2: Choose the Right Policy When Filing Claims

When multiple policies offer overlapping coverage, such as builders risk and general liability, choosing the right one for your claim can be tricky. Let’s say you are at fault for an incident at your project site that results in structural damage. On one hand, you are covered under the builders risk policy for unexpected events that occur during the course of construction. On the other hand, you have a contractor general liability (CGL) policy that covers you for property damage that you cause.

In situations like this, many contractors choose to file a claim against their own CGL policy, rather than against the project’s builders risk, in an attempt to avoid any kind of friction between the general contractor or owner who took out the builders risk policy. But what you may not realize is that a general liability claim may cost you more in the long run. Talk to your insurance provider to carefully explore your options for workplace damage claims, and you may be able to keep your premiums affordable in the future.

And this leads us to our next tip…

#3: Know What Your Policy Does (and does not) Cover

Do you understand the exclusions in your insurance policies? Take the time to review and understand what your policies do (and don’t) cover. That way you can compare the gaps in your coverage to your current risk management strategies and available cash flow. You don’t need to be an insurance expert (that’s why you have us in your corner!); but you should have a basic understanding of what your policies cover, and what situations or scenarios they exclude.

If you see some glaring holes in your current contractor insurance protection, you can take steps to patch them up. Maybe that means including an umbrella policy to help increase the limits of your existing policies in the event of a large claim. Maybe that means adding an endorsement to expand your coverage on a specific policy. If you want to get the best results from your insurance, you need to know what your policies cover.

Conversely, if you notice a bunch of coverage or endorsements built into your policy for risk that you don’t encounter, talk to us about ways removing those may reduce your premiums while still providing you a safety net.

#4: Protect Yourself from the Most Common Claim Scenario

What do more than 20% of all insurance claims have in common? They are a result of burglary or theft. Annual estimates for loss from equipment theft are in the ballpark of $400 million, and some estimates are quite a bit higher than that. And the newer your equipment, the more attractive it is to the sticky fingered criminals who covet it; more than 75% of all stolen equipment is less than 5 years old.

You can put your contractor insurance to work protecting your tools and equipment in three ways:

  • Commercial property insurance: Protects your tools and equipment stored at your place of business from burglary or theft.
  • Builders risk insurance: Protects your tools and equipment from burglary or theft from a project site.
  • Inland marine insurance: Protects your tools and equipment from burglary or theft when you are transporting them to and from storage, project sites, or even your home.

If you're the unfortunate victim of the most common construction crime, tool or equipment theft, these insurance policies can kick in to cover the cost of replacing them. From your favorite hand tools to your high dollar, high powered tools; to the generators and machinery that you’ve invested in; contractor insurance can cover your equipment in just about every situation.

#5: Combine Policies

Shopping around for the best price on your insurance can be a good idea to make sure you are getting the right coverage at the right price. But watch out for one of the pitfalls of price shopping; parceling out your policies to different brokers. Sometimes, the cheapest insurance can cost you big.

A better way to save money on your insurance is to combine multiple policies with the same broker or insurance provider. Often times, you can receive a discount on each policy when you combine them. Want to see even more savings? Put those risk management techniques to work, because the longer you go without an incident or claim, the lower your premiums can be. Everyone wants to save money. Combine the insurance policies you need with an insurance provider you can trust, and you can save more cash without sacrificing your coverage.

#6: Check In Regularly

When was the last time you had a chat with your favorite insurance provider? Go ahead and pick up the phone. Checking in regularly with your insurance broker can help you keep the right insurance coverage working hard to protect your business. You may have bought or sold a vehicle, fired or hired employees, or changed the scope of work that you perform. But if your broker doesn’t know about the changes that happen in your business, your policies may not adequately protect your current operations. You may even be paying more than you need to for your insurance coverage-- you’ll never know unless you contact your contractor insurance specialists and check in.

#7: Advertise Your Coverage

The reason you have insurance is to protect your business and assets from unexpected surprises and financial losses. But did you know that you can put your insurance to work for you to get more customers and help bring in more income, too? Your insurance coverage is a business asset. It shows that you are serious about your business, that you are a professional, and that you can pay for an accident, injury, or unintended occurrence that happens while you’re doing your work.

Advertise your insurance coverage on your website, social media profiles, blog, truck advertising, and business cards. Let clients know that you are insured, and happy to provide a certificate of insurance as proof of your coverage. Your insurance coverage gives you a leg up on the uninsured competition, so be sure to let prospective clients know it.

Smiling Female Contractor

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