How to Choose the Right Small Business Insurance Coverage
Every business needs insurance—and small contracting operations are no exception. The only difference is that your business requires insurance specific to your contracting practices and the services you provide, which is why choosing the right insurance coverage is key.
But, that may be easier said than done.
Read on to learn about the contractor insurance coverage you need and how it can set your business up for success, making your business an attractive to customers and employees.
Contractor Insurance Coverage You Need
What you know: Business insurance protects your company, employees and assets in the event of loss. Whether it’s a lawsuit, unpaid services or fees, or physical damage to your property, it’s your responsibility to ensure your business meets state and federal requirements.
But, what you may not know is that general liability, which also protects against similar risks, doesn’t always cover contractors.
Whether your business grows or continues steadily at its current pace, risks can and do arise at some point. Some insurance coverages you should consider for your business include:
- Contractors insurance
- Contractor or professional liability insurance
- Property insurance
- Commercial vehicle insurance
- Workers’ compensation insurance
- Business interruption insurance
- Equipment breakdown insurance
How Choosing the Right Insurance Sets You up for Success
When you buy a new car or house, securing auto or home insurance is a natural next step. It’s the same principle when you buy new equipment for your business.
Investing in the right contractor insurance coverage adds a layer of protection for your business, minimizes financial risks and can help make your business more appealing to potential employees or investors.
Coverages like contractor liability, property insurance or commercial vehicle insurance all help protect your assets. Policies like these can cover damages that result from severe weather, theft or vandalism, or other natural occurrences.
By the same token, these policies can also reduce financial risks and losses that could occur as a result of:
- Third party lawsuits
- Onsite injuries, which may lead to workers compensation suits
- Business interruptions (like fraud or theft)
- Natural disasters
When you protect your business, assets and employees from risks and loss, your business instantly becomes more appealing to a potential investor. If you ever decide to sell your contractor business, insurance can add a layer of protection that is attractive to these buyers. Prospective buyers want to purchase businesses that offer reasonably low risk with a likely chance of revenue and return. Similarly, prospective employees may also see your business as a more reliable place to work and grow their career.
Questions to Ask Your Insurance Agent and Carrier
Insurance is a necessary investment—and it doesn’t have to be a hassle. Help yourself by doing some research upfront and selecting a partner you trust.
And before purchasing different forms of insurance, there are questions you should ask your insurer or agent.
- Clarify what is covered and what is not, and how much your policy actually covers.
- Find out how your credit history may or may not impact your policies.
- Find out how new purchases, hires and other expenses down the road will impact your policies.
- How can your policy be personalized or custom-fit for your needs?
- Will your agent assist in conducting a risk assessment with you to help determine what coverages will be most beneficial?
Your insurance provider can help identify which coverage is right for your contractor business and offer insight on the value it can bring to your business as a whole.
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