For people who are looking to own their own business, becoming a contractor could be a great option. Contractors are very well paid individuals due to the skill and knowledge that they have. While being a contractor can be a great career, it will require you to make several important decisions. One important decision is whether or not you should invest in contractor’s insurance. There are five key reasons why having contractor’s insurance is very important.
1. Provides Liability Protection
One of the main reasons why a contractor needs to have insurance is that it provides liability insurance protection. Whenever you are completing a job, a contractor will take on a certain level of liability. In the event the contractor makes a negligent mistake, they could be found liable during a lawsuit. Having an insurance policy in place will provide the necessary liability protection.
2. Covers Employee Injuries
Another reason why a contractor needs to have insurance is that it will provide coverage for employees. If a contractor has employees working for them, they will be required by law in many situations to carry workers compensation insurance coverage. This will provide coverage in the event in employees injured while working on the job. If you do not have this type of insurance in place and an employee is injured, you could be found liable for the medical expenses and could jeopardize your business license entirely.
3. Insures Assets
Most reputable contractors will have a considerable amount of investments made into the assets that they own for their businesses. This can include a company truck, equipment, tools, and even inventory. If you do not have an insurance policy in place, you will not have any protection in the event these items are stolen or damaged. A contractor’s insurance will policy will provide adequate coverage for these items.
4. Helps to Win Contracts
When a contractor is looking to make a bid on a new job, they will need to often compete against many different contractors. In many situations, one of the biggest pieces of diligence will be to make sure that a contractor is properly licensed, bonded, and insured. If you do not have an adequate amount of insurance protection in place, it actually puts more risk in the hands of your customer. Because of this, having a proper insurance policy in place will actually help you to win more work and could help you to make a lot more money.
5. Affordable Policies
Finally, one of the main reasons why contractors avoid getting insurance is that they believe it will be too expensive. While contractors insurance will come with an additional cost, it does not necessarily have to be too expensive. There are cheap contractors insurance policies that can provide the necessary levels of protection. This will help to protect a contractor’s assets and ensure they are not found liable. Furthermore, the affordable policies can come from very reputable insurance providers.
When you are looking for a new contractors insurance policy it is important to find the policy that is right for your business. This will include making sure you have the right type of coverage and right coverage amount.