Looking for Contractors Insurance in Fairfield?
Lighthouse Agency Insurance is your local Contractors Insurance expert! We insure many different types of contractors from Landscapers, Electricians, Carpenters, and many more!Who Needs Contractors Insurance?
There are many types of independent contractors who all need independent contractors liability insurance and other coverage to match their specific risks. Some of the professionals that need contractors insurance include:
- Independent construction contractors
- Plumbers, carpenters, electricians and painters
- Repair people
- House and carpet cleaners
- Freelance writers, editors and graphic designers
- Independent hair stylists, and salon professionals
- Horse or dog trainers
Don’t underestimate your risk
- General liability: The foundation of all contractor insurance coverage is a general liability policy. This coverage will provide two types of protection:
- Bodily injury: Provides coverage if you or someone you employ causes injury or death to a third party during the course of work. It provides for medical care for the injured person and covers your legal defense if you are sued for damages.
- Property damage: Provides coverage if you or one of your employees causes damage to property belonging to others. This includes the building or property you are working on or any third-party property.
- Completed operations/product: Provides coverage in case a project you finished has an issue or causes damage. It can also extend to any products you sell or distribute.
- Advertising personal injury: Covers the risk of damaging another’s reputation or causing a loss through slander, libel or false advertising claims.
- Contractual liability: This one is widely misunderstood. It does not cover you in a contract dispute — disagreements over your own work or your own promises are generally excluded. What it covers is the tort liability of another party that you agreed to assume under what the policy calls an “insured contract.” That is how the hold-harmless language in your subcontracts and site agreements actually gets backed by insurance. One timing detail matters: the injury or damage generally has to occur after the contract was executed.
Do you need a Business Owners policy?
The contractors general liability coverages can often be bundled with a few other coverages to create a business owners policy, or BOP. This serves two purposes. It expands the policy to cover risks that small business owners face, and also typically results in a discount on the cost of your insurance. Whether a BOP is available to you has little to do with any general definition of “small business.” Eligibility is set by each carrier’s own underwriting rules, and a number of contracting classes are not eligible for a BOP at all — trades working at height are a common example. (For federal contracting, the SBA sets construction size standards by NAICS code under 13 CFR 121.201, and for most construction trades the threshold is annual receipts well above $19 million, not an employee count.) The practical question is not whether you are small. It is whether a carrier will write your trade on a package policy at all. Some of the additional coverages that can typically be bundled with a BOP include:- Property damage: This insurance covers your owned or rented property if it is damaged. This includes office buildings, storage facilities, warehouses, workshops, or garages. It does not cover commercial vehicles.
- Business income: This protects you from loss of income if your business is interrupted due to a covered loss. How long it pays is not a flat twelve months. It pays during the “period of restoration” — the time in which the damaged property should reasonably be repaired or replaced — and it is capped by the limit you bought. Some forms add an extended period after operations resume. Read the limit, the period of restoration and any coinsurance requirement together, because those three decide what you actually collect.
- Commercial auto: Insures your cars, trucks, vans, specialized trucks or any vehicles used for business purposes.
Do You Need Workers Compensation Insurance?
Whether you need workers’ compensation depends on your state and on whether you have employees — and Ohio works differently from most states in a way that matters. Ohio is a monopolistic state, which means workers’ compensation is purchased from the Ohio Bureau of Workers’ Compensation rather than from a private insurance company. An Ohio employer with one or more employees must carry BWC coverage. Sole proprietors, partnerships, and LLCs acting as a sole proprietor or partnership may elect coverage for themselves instead of being required to carry it, and BWC keys that on how the business is organized and operating, not on how it is taxed.
Two things catch contractors here. First, BWC coverage does not include employers liability — the part that responds when an injured employee sues you rather than simply claiming benefits. In Ohio that is added by a stop-gap endorsement on your general liability policy, and it is worth confirming your umbrella sits over it, because many umbrellas require it to be scheduled. Second, under Ohio Revised Code 4123.35, a private employer that hires a subcontractor can be held liable for unpaid premium owed on payroll for work performed under that contract. That attaches to unpaid premium, not merely to uninsured subcontractors, which is why collecting a certificate is not a complete defense. This policy protects workers from job-related illness, injury or death. It will also reimburse workers for lost wages if they cannot go back to work. The benefit to you, as the employer, is that this coverage can help to prevent losses from employee lawsuits.
Should You Consider Professional Liability Coverage?
When you are looking for the right contractors insurance for your business, you will have many choices, including whether to buy professional liability insurance, also known as “errors and omission” insurance or “E & O.”
E & O is a liability policy that protects you if you make a mistake that causes a financial loss to a client. Similar to general liability, it will provide legal defense and claims settlements, if necessary.
You may want or need this coverage under the following circumstances:
- You provide professional advice in your line of work. This can include everything from recommending a particular type of plumbing or wiring to providing interior design services.
- You hire employees or subcontractors who provide any sort of advice or consulting services.
- Your state requires you to have E & O insurance due to the work you perform.