All contractors, and most especially those in the construction industry, are exposed to a variety of inherent risks. Injuries, liability lawsuits and equipment damage are prevalent in the industry. Contractors insurance helps both general and artisan contractors in Massachusetts protect their businesses from many covered risks like these.
Contractors insurance policies are a specialized form of commercial insurance. These policies are specifically designed to help mitigate the risks that contractors are exposed to, and most use several coverages to do so.
Most contracting businesses in Massachusetts should have a contractors policy. As mentioned, this includes both general and artisan contractors.
General contracting firms need insurance coverage because their work leaves them exposed to a lot of risk. Regardless of whether a firm does residential, commercial or mixed development, general contractors work on big projects where a single error could have vast implications. In many cases, general contractors aren’t even able to get jobs unless they have minimum levels of insurance because the risk is too great to be unprotected.
Insurance is just as important for artisan contractors in the construction industry who own their own small businesses or are self-employed. Plumbers, carpenters, electricians, roofers and similar professionals may not face the same level of risk as general contractors, but they’re still exposed to a significant amount of risk. Additionally, they often have fewer financial resources to address an incident with.
In some cases, artisan contractors outside the construction industry may want insurance. Interior decorators, exterminators and other skilled professionals must assess their own risk exposure and their business’ ability to withstand a potential incident. An experienced insurance agent can help with this process (as they can with contractors for the construction industry).
Because contractors policies are used to insure many different kinds of general and artisan contractors, the protections within specific policies can vary. Some of the protections that a policy might include are:
Contractors liability insurance and the other liability protections that a policy provides will normally begin covering legal defense fees as soon as a contractor is named in a covered liability lawsuit. The property insurance coverages typically help pay for equipment or other property that’s lost or damaged by a covered peril.
Contractors’ policies premiums also vary. Broadly speaking, contracting businesses that are exposed to more risk pay more than those that face less risk, because with increased risk exposure comes greater protection needs. Thus, a general contractor who builds commercial buildings might expect to pay more for insurance than a roofer who only works on single-family homes.
Having a policy, however, is almost always less expensive than facing a potentially expensive claim without any coverage in place. While some businesses pay higher premiums than others, few (if any) can afford the possible cost of not getting insurance.
Selecting a contractors policy is more involved than getting some other types of insurance. Contractors should first accurately and fully assess their business’ risk exposure, and then the should choose coverages based on their business’ needs. For instance, the contractors liability insurance chosen should be appropriate both in amount and coverage definitions for the work that a particular contractor does.
Massachusetts contractors can get help with this multi-step process by talking with an independent insurance agent who’s familiar with the nuances of contractors insurance policies. A specialized agent will know how to assess risk exposure and select coverages, and the agent also can compare policies from different insurers if they’re independent.