Why Do Construction Companies Need Contractors Insurance?

​Like any other business, construction companies are vulnerable to a wide variety of liabilities and risks. Construction sites are highly prone to unexpected circumstances that might put the company’s finances in jeopardy. Hence any construction business owners need to protect their company from anticipated perils.

It is always a good idea for construction companies to get contractors insurance. The insurance policy is designed to safeguard your business since it can provide financial coverage to risks that contractors commonly encounter.

Importance Of Contractors Insurance

1. Client’s requirement
   Most clients might require contractors to have a contractor’s insurance before they could win a job or project. In most cases, clients are meticulous in hiring a contractor. They check if the contractor has the appropriate license and insurance coverage before working with the contractor. Clients do not want to be liable to pay damages if an accident occurs, for example, on the construction site.
2. Unexpected accidents or events in doing business
   If a client got injured on your construction site, your insurance policy could cover the costs associated with the client’s lawsuit. Hence, contractors insurance helps protect your business funds. If you do not have an insurance policy, you have no choice but to use your business funds to pay the injured client. It could threaten your financial viability and might put you out of business.
3. Certain types of contractors’ insurance might be required by law. 
   State regulation might require you to have certain kinds of insurance coverage. Many states require businesses, including construction companies, to get workers’ compensation insurance for their employees. Moreover, workers in a construction site are vulnerable to accidents. If a worker got injured while doing his work, your insurance policy would pay the worker’s lost wages and the expenses in giving him medical treatment.

Types Of Contractors Insurance
Here are several types of contractors insurance that are suitable for construction companies:

• General liability insurance. An insurance policy provides financial protection to your business against the lawsuit filed by individuals you got injured or damaged their property because of your business operation. If someone tripped over unconcealed wires, general liability insurance could pay the expenses brought by a lawsuit.
• Workers’ compensation insurance. It is a type of contractor insurance that helps protect your employees. If one of your workers fell from a ladder and got injured, this insurance can pay the employee’s lost wages and medical expenses.
• Builder’s risk insurance. It is insurance that covers the structure and materials in an unfinished project. The policy can cover the damages brought by fire, weather disturbance, or vandalism.

Conclusion
Most construction projects run for several months to a couple of years before its completion. The type of job and length of the projects expose construction companies to many risks. Hence, it is always better to have contractors’ insurance coverages for your business protection.

At Black And Associates Insurance, we do our best in making sure that our clients are well-protected with affordable and comprehensive policies. We make sure to go the extra mile to help you with your needs. To learn more about how we can help you, please contact our agency at (509) 464-0058 or Click Here to request a free quote.