When you take on a remodeling project, you take on a lot of risks. In addition to wanting the project to go well for your reputation, there’s a risk that an accident or mishap could lead to you having to pay out a lot of damages. To protect yourself, you need the right remodeling contractor insurance package.
Do You Have to Have Remodeling Contractor Insurance?
The short answer is yes. Even when you don’t need insurance or a bond by law, it’s a terrible idea to go without insurance. Just one major injury or a significant amount of property damage could leave you with a lawsuit or settlement that puts you out of business or erases your retirement savings. Your clients will also typically ask for proof of insurance since they’ll want to be protected in case something happens.
What Work Does Remodeling Contractor Insurance Cover?
There are different levels of policies that depend on the type of work you do. This might range from basic remodels like replacing kitchen cabinets to major structural renovations like adding a new room or removing load-bearing walls. If you work on historic properties, you may need specialized coverage to cover the added risks that come with dealing with those types of properties.
What Type of Coverage Does Remodeling Contractor Insurance Include?
Remodeling contractor insurance isn’t a specific type of insurance. It’s a group of insurance coverages that remodeling contractors typically need. You can customize your plan based on your particular business and any other types of insurance you already have. Here are some of the most common coverages.
General Liability Insurance
General liability insurance protects you against lawsuits or pays for settling claims that could lead to you being sued. This includes things like injuring a customer or guest while working on a job, damaging a customer’s property, having a customer or guest get hurt in your showroom, or getting sued for slander.
General liability insurance may also cover damage caused by your work. For example, a cabinet you installed may fall and injure someone and damage their kitchen. Some insurance companies will put these types of incidents under a separate professional liability policy instead of your general liability coverage.
Workers’ Compensation Insurance
Workers’ compensation insurance protects your employees if they get hurt. By extension, it also protects you from employee injury lawsuits. Workers’ compensation covers their medical bills and lost wages. You’re almost always required to carry this coverage by law when you have employees.
Commercial Auto Insurance
Commercial auto insurance protects your truck, van, or other work vehicles against accidents and other mishaps. Keep in mind that your general liability coverage typically does not cover auto-related claims, and your personal auto insurance won’t cover you while you’re working even if you’re using your personal vehicle. Commercial auto insurance works similarly to personal auto insurance with separate options for liability, collision and comprehensive, and medical payments.
Contractor’s Tools and Equipment Insurance
If you have tools and equipment stolen while you’re working or when they’re in your shop at night, tools and equipment coverage will reimburse you. It can also protect your equipment against fires and other disasters. You may also find this coverage under commercial property insurance. Commercial property insurance is the same thing, except it can also protect any buildings you own against covered disasters.
What Counts as Remodeling for Remodeling Contractor Insurance?
There are no specific rules on what counts as remodeling for remodeling contractor insurance. Remember that remodeling contractor insurance is actually a package that you customize. Your insurance agent or insurance company will ask what type of work you do when writing your policy. For example, if you say you do home kitchen remodeling, you may not be covered if you remodel a bathroom or work on a commercial kitchen. You may also not be covered for new construction. If you want to do additional types of work, you’ll have to add them to your insurance policy before you take on those jobs. The advantage of this is that you can tailor your coverage to your exact needs and not pay to insure against risks that you never take on.
Can You Add an Additional Insured?
Many clients, contractors, or subcontractors you work with may ask that you add them as an additional insured on your policy to make it easier for them to file a claim if something goes wrong. This is simply a matter of convenience for everyone. Most insurance companies will allow you to do this at no extra charge quickly.
How Much Does Remodeling Contractor Insurance Cost?
The cost of remodeling contractor insurance will depend on many factors. This includes the work that you do, what type of clients you take on, the value of the projects that you work on, the coverages you select, and the limits you need. You may also be able to lower your premiums by taking steps like choosing a higher deductible or maintaining a safe work environment. Since remodeling contractor insurance is tailored to your specific business, you can always find a reasonable price in relation to the work that you do.
Get a Quote
Your independent insurance agent can help you figure out what coverage you need without you having to worry about an insurance company’s sales agent trying to oversell you. Your insurance agent can also help you quickly get quotes from multiple providers. If you’re near Phoenix, Arizona, contact Dave Mohr Agency today to get started.