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Insurance Every General Contractor Needs

Expect the unexpected

As a general contractor1 you’ve probably come to expect the unexpected. As the person in charge of an entire worksite, you may oversee various subcontractors, ensure deadlines are met and that all work being performed is top-quality. Chances are you’ve already put out some fires and either wish you had insurance or are thankful for its protection. 

General contractor insurance

It’s easy to understand why insurance for contractors is either legally required or extremely recommended. Construction sites and renovation projects can be dangerous places, and the general contractor is responsible for everything from the safety of the site to the quality of the finished project.

 

An accident or injury to you or a victim of a construction mishap could cause big problems with your construction business. Woligo’s insurance solutions help cover medical bills, legal fees, and your income if the unexpected happens. Mistakes happen, and general contractor insurance is critical to protect a general contractor from liability, negligence, and other issues that may arise. 

Commercial general contractor liability insurance

General contractor liability insurance helps safeguard your business if you are sued for third-party property damage, third-party bodily injury, or reputational harm during your work. One lawsuit could quickly drain you and your company of funds. General contractor liability insurance varies in cost depending on a number of factors, such as:

 

  • Your business’ risk: Some businesses (such as those that deliver or install equipment) are more likely to become involved in property damage or bodily injury simply because of the nature of the work. It’s important to note that some businesses you work with may require that you, as an independent contractor or consultant, carry a certain dollar amount of coverage if you are going to work for them.

  • Your business’ location: Each state and city has different rates. You can typically expect to pay a higher premium if you operate a business in a highly-populated area.

  • Your employee count: Simply put, the more employees you have, the more you will pay in premiums.

Workers compensation insurance

Workers compensation insurance is a type of general contractor insurance that many states require. Crossing your fingers and hoping your employees never get injured while on the clock isn’t a valid insurance policy. As the general contractor, you can create the safest work environment possible, but there are still some things that are out of your control. 

 

If one of your workers is injured while doing their job, the medical bills, lost wages, and legal fees you may be on the hook for quickly add up. Workers’ compensation is meant to help protect you and your employees. If your employees are injured or ill because of the work they are doing for your business, workers’ comp is designed to help cover the injured party’s medical care, disability benefits, and any lost wages from being away from work. 

 

If that injured employee or their family sues you (the owner of the business), your workers’ compensation insurance may help cover your legal fees. Even if the workplace accident results in a fatality, self-employed workers’ compensation insurance may help cover the loss of life, including funeral costs and death benefits to the employee’s beneficiaries. None of us like to think about the possibility of a tragedy, but the truth is that being prepared helps remove stresses if the worstcase-scenario were to unfold.

How much does workers' compensation insurance cost?

The cost of workers’ comp insurance depends on your business’s unique needs and circumstances. Your insurance should cover your specific risks — nothing more and nothing less. Your premium will be calculated based on:

 

  • Your industry
  • Type of work you and employees do
  • Claims history
  • Number of employees
  • Employee salaries and wages
 

One of the most significant factors is the type of activities workers will perform while on the clock. The National Council of Compensation defines workers’ compensation class codes in order to categorize how much coverage certain types of jobs require based on their risk.2 But don’t worry, you don’t have to try and calculate the coverage on your own! Woligo is here to help.

Business Auto Insurance

Driving to client meetings, driving to a construction site, driving a rental car while on a business trip — driving is often a big part of a general contractor’s role. That makes keeping that car, truck, or van insured vital. 

 

Business auto insurance (also known as commercial auto insurance) helps cover physical damage and liability for accidents or fender benders that happen while driving a business-owned vehicle or using a vehicle for business purposes.

What does business auto insurance cover?

Each business auto insurance policy varies depending on the coverages included. Most policies help cover the damaged property and medical expenses incurred due to an auto accident while involved in business activities.

Depending on your needs, your policy may also include:

 

  • Rental reimbursement coverage – helps cover the costs to rent a car while your vehicle(s) are inoperable.

  • Towing coverage – helps cover towing fees if you are not able to drive your car.

 

Business auto insurance doesn’t just cover trucks or work vehicles. It may also

extend to regular, four-door sedans operated for business purposes. If the vehicle

is used to accomplish a job, it may be included in your policy. If comprehensive

auto insurance is important to you, click here

How much does business auto insurance cost?

As with personal auto insurance, the cost of business auto insurance fluctuates

depending on the type of car you drive and other individual factors. Your premium

will be calculated based on:

 

  • The driving record of the driver who will be operating vehicles for work-related activities
  • The make, model, and year of your vehicles
  • How far you will be driving commercial vehicles
  • What the vehicles will be used for
 

The more company-owned vehicles you own – and the more miles they travel — the

higher your commercial vehicle insurance premium will be. The best way to know

how much you can expect to pay for commercial auto insurance is to request a

quote.

Disability insurance

As a general contractor overseeing entire projects, disability insurance is likely super important to your work-life world. Why? If you become sick or injured and can’t work for some time (and it’s confirmed by a doctor) disability is designed to cover up to about 70% of your paycheck or income. That’s why it’s sometimes nicknamed “paycheck protection.” Basically, disability insurance for small business

owners helps make ends meet until you get back on your feet. 

 

Unexpected events happen in life. Cancer and mental health issues are two common reasons for disability insurance, and both of these conditions, as well as others, could pull you away from work for months or even years. As a self-employed individual, your income depends on your ability to work. If you become disabled, you could lose your income. 

 

Disability insurance has earned the moniker “disability income insurance” because that’s what it is. When you can’t work because of a serious illness or injury, disability insurance helps cover out-of-pocket expenses. Its purpose is to replace a percentage of your income. The best part about including disability insurance in your general contractor insurance is that disability insurance is paid directly to you. 

How much does disability insurance cost?

Your insurance premium is generally based on your desired coverage and your annual salary, along with other life factors. Typically, you can expect to pay one to four percent of your income towards your insurance premium. The factors considered when calculating your insurance premium include:

 

  • Your salary
  • Your occupation
  • Your age
  • Your gender
  • Your health history
  • Your location
  • Your benefit amount
  • Your benefit period
 

When choosing your general contractor insurance plan, you should also consider planning for future expenses, such as retirement or children’s education expenses. Insurance is one of those payments that can be frustrating to make until you need it. There’s no telling when your next “oh no” is going to be, and disability insurance protects your income, your home, your car, your belongings, and your health. Disability insurance is essential because the entire idea of accidental injuries and illnesses is just that — they are unplanned. Are you interested in calculating your disability insurance premium? Get a quote today.

Limited benefit accident insurance

General contractors spend a lot of time on renovation and construction sites filled with electrical wiring, heavy machinery, uneven terrain, and other dangers. Accident insurance helps provide financial protection for those who may become injured or deceased due to an unexpected accident. 

 

This type of insurance for contractors helps cover out-of-pocket medical expenses and other bills that emerge while you are healing from your injury. It works alongside your primary health plan, making payable benefits directly to your pocket instead of to the medical facilities that are treating you. 

 

It is complementary to disability insurance because you can receive benefits even if your injury doesn’t prohibit you from working. The greatest benefit is that it helps provide a financial cushion that may help give peace of mind.

What does accident insurance typically cover?

Benefits, both medical and non-medical, can be available through accident insurance benefits. This can include benefits related to various medical events, whether or not your health plan covers them. This can help cover medical bills charged to you before you reach your deductible. 

 

This is not a comprehensive list, but the benefits generally offered through accident insurance may include:

  • Hospital admission and confinement
  • Intensive care unit
  • Air and ground ambulance
  • Emergency room treatment
  • Emergency dental
  • Lodging
  • Transportation
  • Surgery
  • Dislocations
  • Fractures
  • Burns
  • Dismemberments
  • Eye injuries
  • Major diagnostic exams
  • Accidental death

What does accident insurance typically not cover?

Accident insurance benefits are generally not payable if your injury was received under the following conditions:

  • Any condition covered by a workers’ compensation or occupational disease law

  • Suicide or attempted suicide

  • Intentional self-inflicted injury

  • Any act of war

  • Participation in a riot

  • Injury incurred while on full-time active military duty

  • Injury while engaged in illegal activity

  • And more

How much does accident insurance cost?

Accident insurance is available for self-employed workers at a competitive price

from Woligo. Many independent workers may expect to pay high teens or low 20s

for their premiums.

Need for general contractor insurance

General contractor liability insurance, workers compensation, disability insurance,

and business auto insurance are just a few of the types of insurance for

contractors. Construction sites house dangerous machinery, equipment, and

exposed wiring that can easily become hazardous. Protect yourself, your business,

and your workers by getting the right insurance today. 

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Sources:

  1. https://blog.scitraining.com/what-is-a-general-contractor-and-what-do-they-do/
  2. https://classcodes.com/workers-compensation-class-codes/