When you work in construction, you’ll need protection in case something goes wrong. This is where insurance can make a big difference. There are a variety of types of insurance for businesses, and some of them are specifically designed for industries like construction. Here are the most common forms of coverage for contracting businesses, and how to tell when you need them.

General Liability
As a business owner, you’ll be obligated to carry a form of general liability insurance. If you consider how your car insurance works, liability may be easier to understand. When you buy car insurance, you can usually decide if you want the insurance to cover anything that happens to you, or just damage that you might cause to other people and their vehicles. Similarly, general liability insurance provides protection for damage that you or your equipment may cause on a jobsite. For example, if you accidentally cut into someone’s gas line, your liability insurance may cover the repairs. It’s vital to get the right amount of coverage depending on your field and the type of work you do.

Errors & Omissions
Errors and omissions insurance is similar to liability insurance, but it isn’t dependent on physical risks or damage. As a business owner, you can be held liable for problems that you caused, even if they don’t result in tangible damage. Insurance that covers errors and omissions is designed to provide coverage for events that caused financial problems to clients based on actions or decisions made by your business. If someone sues you under the basis that you left something out or made an error during the process, this type of coverage may pay for part of your defense. As with any other type of insurance, you’ll need to determine how much you’re willing to pay on your own, and what you’d like the insurance to cover.

Builder’s Risk Insurance
Builder’s risk insurance is a type of insurance that protects the property related to a particular job. As a contractor, you’re usually performing work on someone else’s property. If something happens during construction, to you, your equipment or existing structures, having insurance to cover the damage can be beneficial. Builder’s risk insurance varies in coverage, so it’s important to read the details carefully. It may overlap in some ways with general liability insurance, but isn’t designed to replace it. You or the property owner may be the one who buys the policy, depending on a variety of factors.

Workers’ Compensation
In an industry that is as risky as construction, providing protection in case you or one of your employees gets injured is important. In fact, worker’s compensation insurance is a law you have to follow. As a general rule, this insurance covers medical expenses and some lost wages for people who are injured in the course of their jobs. It’s tied specifically to activities that people do while they are working or on the jobsite. There are times when this may overlap with insurance like builder’s risk or general liability. If you’re not sure which policy to apply to a certain incident, it’s wise to ask your insurance agent.

Equipment Insurance
You may not think of your construction equipment as something that is uniquely at-risk, but it’s worth considering insuring what you have. Like your car, you don’t keep an eye on your construction equipment 24 hours a day. This means that, in the wrong hands, it may get damaged or even stolen. Equipment insurance covers certain problems as they relate to the equipment. For example, if you are moving equipment and it gets damaged in the process, this insurance may cover the cost of repairs or replacement. Some policies may also cover equipment rentals or tools.

Insuring your contracting business against possible problems is one way you can protect your assets and the important work you do. To learn more about starting your own contracting business, visit CSLS today!