It’s always tempting to hire the contractor with the lowest bid, but before you sign on the contact line, there are things you need to consider. One essential item is verifying if the contractor you pick has general liability and worker’s compensation insurance coverage. Why does a contractor need insurance? If the contractor has insurance, you will not be liable for damages or injuries that occur while the contractor is on the job. If you cannot verify coverage, choose another contractor. Injuries and damage from a contractor will cost you dearly if the contractor does not have insurance.
Start by following these tips:
- Ask your prospective contractor for the name of his insurance carrier. Make sure you get the agent’s name and phone number. (Ask the contractor for the business card of his agent. A business card is a sure way to confirm you have the right information.)
- Verity the agent by looking up his name and phone in the phonebook or on the Internet.
- Contact the agent or the company and request a certificate of insurance. This certificate will prove that the contractor has liability insurance coverage and worker’s comp.
Why Contractors Need Insurance
The construction industry is enormous and can be very profitable if you know your way around a toolbox. The competition, however, is great, and having liability and workers comp insurance might give you an edge in the bidding war. Not to mention that insurance policies are meant to protect you and your customers.
If something goes wrong on a job site, an independent contractor can be held liable for damages and injuries. General liability insurance protects independent contractors from being sued for damaging the client’s property or causing bodily harm.
How to invest in insurance is not difficult. It can be done in two different ways.
- Your client adds you to their general liability policy as an additional insured. Their insurance covers you for the duration of the job. You listed under your client’s insurance can be more expensive for the client; however, they may decide to add you depending on the situation.
- Purchase general liability insurance from a trusted insurance company in Utah.
- Both options provide protect you and your client if you are faced with a lawsuit over third-party property damage or bodily injury.
Why do you need insurance? In many cities and states, it’s not a question of whether or not you need it. Contractor liability insurance is required by law. There are different regulations for different areas. Be proactive and look up your areas insurance rules. It would be devastating if something were to go wrong, and you had no insurance or the wrong insurance.
Penalties for not having insurance vary from area to area. However, if you fail to get insurance as a contractor, and it’s required, you could pay hefty fines that could potentially destroy your business.
Contractor insurance also protects your business in the event of a customer dispute. Resolving customer disputes can take time, and it’s recommended that to protect your reputation, you negotiate amicably. If you need to fix a mistake like a wall that wasn’t built right or an appliance installation that went wrong, insurance can be the way to take care of the financial requirements. With an insurance policy from a trusted insurance company in Utah, you will be in a much better position to pay the necessary damages, resolve the matter, and protect your reputation.
Contractors need liability insurance, so that bad jobs don’t damage their business. General liability insurance covers you if a third-party injures themselves by tripping over a wire or if you accidentally damage property. Without insurance, paying for these medical or repair costs could be disastrous.
As you set up your business, contractors know that they need tools, truck, marketing, setting up a website, and paying employees. Margins will be thin if you bid a job too short and having to pay out funds to resolve liability issues could bankrupt your business.
The bottom line is to get insurance from the best insurance company in Utah and keep your insurance certificate accessible so you can prove to a customer that you are insured. It stops the worry on your part and the stress on the part of your customer.