Framing contractors need a combination of specialized and general business insurance to meet their needs. This is true whether you work in residential or commercial or if you specialize in new construction, renovations, or repairs. You can buy the coverage you need separately or as part of a framing contractor insurance package.
General Liability Insurance
General liability insurance is the most crucial insurance coverage for any type of business. It covers you if you get sued because of your work. This can include any property damage you cause as well as damages for bodily injuries. General liability insurance also covers the legal costs related to a covered claim whether you successfully defend the claim or not. If your insurance company and attorney decide that it’s prudent to settle even if your liability isn’t certain, your general liability insurance will also kick in.
One key exception from general liability insurance is that it won’t cover your work itself. So if you accidentally put a 2×4 through someone’s window, you would be covered for the cost of fixing the window, but you’re not covered for the expenses you incur if you install a frame incorrectly and have to take it out and replace it.
If you poorly install a frame and it causes a building collapse or other damage, whether your general liability insurance applies is a trickier question. If you’ve purchased your liability insurance as part of a framing contractor package, the policy should be written in a way that you’d be covered for this claim. A general liability insurance policy that’s written for all business types may tell you that this is a professional liability claim that requires a professional liability policy to be covered. This is why it’s important to work with an insurance agent when buying coverage so you can make sure you understand exactly what you need and what you’re buying.
Workers compensation protects your workers if they are injured on the job. It also protects you from having to pay the cost of their lost wages, medical bills, and related expenses after a workplace injury. In Arizona, you generally need to carry workers compensation insurance for any of your employees. This is a legal requirement similar to having to have car insurance to drive. While workers compensation insurance rates are generally set by law, with adjustments for your claims history, you can obtain coverage from any provider, including as a package with your other framing contractor insurance.
Commercial Auto Liability Coverage
When you have a work vehicle that you use to bring your tools and materials, you need to have commercial auto liability coverage. This is true even when you use your personal truck or van that you have personal auto insurance on. Personal auto insurance generally excludes claims you make that happened while you were conducting business activities unless you added commercial coverage as well. You should also consider a hired or non-owned commercial auto liability policy for any vehicles that you rent or that your employees drive. If your employee causes an accident while working for you, you could be held liable regardless of whether their personal car insurance applies.
Umbrella insurance gives you expanded liability protection on all of your policies. For example, instead of increasing both your commercial general liability and commercial auto liability limits, you could add on umbrella insurance instead. This usually gives you a more cost-effective way of covering yourself against more significant claims.
Commercial Property Insurance
Commercial property insurance protects your tools, equipment, and material from theft, fire, and other covered causes. Remember that your liability policies cover harm you do to others, so you need property coverage to be able to replace your own business property if something happens.
Builders Risk Insurance
Builders risk insurance is a more specialized and customizable insurance that framing contractors may or may not need. One of the primary uses of builders risk insurance is to cover new construction until the building is ready for occupancy, and the risk of loss passes to the first owner. If you’re not the primary contractor, this risk may not apply to you. Another use of this coverage is covering consequential damages to your client, such as additional expenses or lost income, in the event you aren’t able to complete the project by the deadline.
Do I Have to Have Insurance?
Check local regulations for when you must carry insurance or post a bond to cover potential damages. Any client is also free to require proof of insurance before hiring you and often will. Further, if you choose to go without insurance, you’re taking the risk that a single accident or mistake could result in a lawsuit that puts you out of business or even wipes out your personal savings.
How Much Does Framing Contractor Insurance Cost?
Since framing contractors need multiple types of insurance and have varying insurance needs, there is no fixed cost for framing contractor insurance. You may be able to save money by using a single insurance company for all of your needs.
How Do I Know What Insurance I Need?
The type and amount of insurance you need depends on your risks. If you’re a subcontractor, your needs may be less as the main contractor may carry insurance that covers you for certain parts of the job. If you work on more valuable properties or commercial properties, the potential losses from mistakes are higher, so you may need more insurance. You can work with your insurance agent to evaluate your risks and what insurance you need to cover them.