Some locations are simply riskier than others. Where you work: Both the geographical area where you are working and the nature of your worksites could have an impact on how much business insurance for contractors will cost you.You will need to decide whether the monthly savings are more important to you or whether it would be better to keep your deductible lower in case you do need your insurance to pay for something. As with the coverage amounts, there are tradeoffs in either direction. This is the money you would be expected to pay out of pocket after filing a claim before the insurance starts covering costs. Deductible amounts: One way you can reduce your monthly insurance costs as a contractor is to increase the amount of your deductible. You will have to decide for yourself whether the added costs are worth it or not for the extra peace of mind. But they do come at a cost you will be paying more each month for your insurance if you opt for higher coverage amounts. Coverage amounts: Higher coverage amounts in your policies will help you to pay for larger damages.The riskier your contractor business appears, the more expensive your insurance quotes are going to be. The types of equipment you operate as well as the nature of the work you perform also can impact risk perception. A roofing contractor, for example, who is constantly working at heights, might be considered a riskier customer by an insurance carrier than other types of contractors who are working in safer settings. Your type of contractor business: With so many different types of contractor businesses out there, there is a pretty wide range of risk between them. Here are some additional factors that can impact the cost of contractor insurance: That is why it is essential to shop around to make sure you are getting the best deal. General liability insurance: $90 a monthĪdded together, you can see how you could easily end up paying in excess of $500 a month for all of your necessary contractor insurance policies.Here are some common averages we see quoted: How much is contractor insurance? That depends in part on the types of coverage you purchase. Factors that Affect the Cost of Contractor Insurance While these are some of the most popular types of insurance for contractors, there are additional types of policies that may be worth purchasing as well, depending on your business operations. Business income insurance will help you to offset the lost income during this interrupted period when you would usually be working. Perhaps an essential piece of equipment was damaged or stolen, for example, and you simply cannot work without it. Business income insurance: Imagine something interrupts you from being able to carry on business as usual.With a surety bond, you will be able to reimburse the customer. You now are not able to complete your work on the project. Perhaps a storm destroys the section of a building you were working on, or a crucial supply becomes unavailable due to manufacturing shortages or distribution problems. But then, something prevents you from finishing the work. The client invests in the project, and you begin working on it. Surety bonds: Let’s say you have a contract to work on a job for a client.You can do so with a tools and equipment policy. Tools and equipment insurance: As a contractor, you have a large assortment of valuable tools and equipment that you are going to want to protect in case of damage or theft.This insurance will cover lost wages and medical costs for workers who get sick or injured on the job. Workers’ comp: If you have employees, it is a state requirement that you pay for workers’ compensation insurance.Cover your work vehicle(s) with commercial auto insurance. Commercial auto insurance: A lot can go wrong on the road as you are driving your business vehicle to and from job sites (or even as you are parked at job sites).Another name for this type of policy is “professional liability insurance.” Errors and omissions insurance: If there are damages as a result of some kind of negligence on your part (whether real or perceived), errors and omissions insurance can help you cover the costs.If you are going to get just one type of insurance for your contractor business, this is the top recommendation. For example, if a customer trips over a bucket of paint you have sitting out, then falls and sprains his ankle while also staining his carpet, general liability coverage would help you afford the costs if he sues you for the injury, the property damage, or both. General liability insurance: This is the type of insurance that covers damage to someone else’s person or property.But what types of insurance do you require? Now you know who needs contractor insurance and a few of the reasons why. There are plenty of other contractor jobs out there, and all of them require insurance. The list above is not a comprehensive one.
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