Like many industries, contractors have very specialized business insurance needs. When choosing an insurance provider, contractors would be well served to work with an agent that understand their industry. Here are 5 contractor insurance tips to make sure you have the right coverage for your business.
- Understand additional insured endorsements. There are dozens of additional insured forms in common use. The verbiage of these forms determines who is considered an “insured” and under what circumstances. For example, the newer ISO CG2010 form has been amended to provide coverage only for “ongoing operations”. The additional insured is afforded coverage only when the injury or damage is caused “in whole or in part” by the actions of the named insured. To provide coverage for “completed operations” a separate endorsement, the CG2037, must be added to the policy. To complicate matters further, many insurance carriers use proprietary additional insured forms versus the standardized ISO forms. It is important you understand what additional forms are included in your policy and whether they comply with your contractual obligations.
- Buy an umbrella policy. A commercial umbrella policy is designed to provide an excess limit of coverage ($1M or higher) over your general liability, commercial auto, and employers liability. The peace of mind afforded by an umbrella policy cannot be overstated. Even a small construction company can be involved in a large claim for injury or property damage, and can quickly see primary coverage limits exhausted.
- Consider an installation floater. Many contractors think they do not need this coverage, especially those involved in service and repair. However, an installation floater is very affordable and provides extremely broad coverage for property, equipment, or materials that are to be made part of a construction project. Coverage is provided for property in transit and is broad enough to cover damage to property in your care, custody, or control.
- Avoid the “independent contractor” mistake. The law in Nevada, and most other states, requires that everyone working on a construction project be covered by workers compensation. Just calling your employees independent contractors, or having them sign a statement to that effect, does not make it legally so. If you have laborers that are under your direction and control, they are employees and must be covered by a workers compensation policy.
- Be proactive about safety. Construction firms that take safety seriously will have lower insurance cost, which translates into higher profits. A formal safety program including regular safety meetings, job site talks, and management involvement are key to reducing employee injuries and liability claims. Insurance companies typically have risk management departments that offer free inspections and training materials. Additional, the State of Nevada SCATS Division will assist with safety programs and training.
Lastly, when shopping for contractor insurance, consider the professionals at Safeguard Insurance. We have worked with construction firms large and small for nearly 20 years. We represent some of the strongest providers of construction insurance including Acuity, Nationwide, and Liberty Mutual. Call us at 702-638-0022 for a no-obligation quote or policy review.