8 Types of Small Business Insurance

As a small business owner or independent contractor, chances are that you’ve had some experience with contractors insurance. In Illinois, Contractors insurance is essential to protect your business, employees, and your clients in the event of accidents, injury, property damage, or bodily harm. It’s essential to know what you have and what you might need in the future to ensure you have the broadest protection. Without insurance, you could be held liable for reported accidents and, in some places, you could even break the law.

There are several types of insurance that general contractors may need to purchase in Illinois. To get a better idea of which of the most common contractor insurance policies your business may need, this quick guide is here to assist.

1. Contractors General Liability Insurance

This is one of the most important coverages a contractor can have. General liability insurance protects contracting businesses from losses due to accidents, vandalism, theft, third-party injuries, and legal actions. Commercial general liability will cover any compensation or legal expenses that you acquire during a litigation process.



2. Workers Compensation Insurance

Workers compensation insurance covers the employees of a company if they are injured while fulfilling their job duties. If you or one of your employees are ever injured while on a job, workers compensation insurance provides wage assistance and help with medical expenses. In addition, workers compensation offers benefits to families of injured workers in the event of accidents.

3. Commercial Auto Insurance

If you plan to purchase and utilize a vehicle or several vehicles for your business, this coverage is essential. A commercial auto policy covers any property damage or bodily harm that was caused by those vehicles as a result of an accident. Commercial auto insurance protects your business as a whole, including all the drivers and vehicles operating under your company's name.

4. Contractor's Disability Insurance

Most independent contractors rely on physical hard work to earn a living, so if any injuries limits your abilities to work, temporarily or permanently, you could lose your primary source of income. Disability insurance provides coverage for lost wages and business expenses in case of an injury. You will need to decide whether short-term, long-term, or both types of coverage are best for your needs. 

5. Builder's Risk Insurance

If in the middle of a project, disaster strikes, you'll want a comprehensive builder's risk policy. Builder's risk insurance protects construction projects while they are in progress, protecting the materials installed from fire, weather, vandalism, theft, or other damage. Traditional property insurance covers damages to existing buildings or structures but doesn’t cover them during construction or remodeling. The policy will pay for work that must be replaced and compensate contractors for delays caused by damage.

6. Tools and Equipment Insurance

Damage to the equipment or tools that you use every day can completely stop operations—especially if the equipment is costly to repair or replace. Equipment insurance can cover most contractors equipment from hand tools to heavy machinery and helps you to get back in business quickly after damage to your company's tools or equipment.

7. Inland Marine Insurance

Inland marine insurance coverage is an important policy for your company if you haul tools and equipment or are transporting borrowed or rented equipment. This coverage protects any of your company's property or materials while they're en route and involved in your business operations. 

8. Umbrella Insurance

Umbrella insurance provides you and your company with additional liability to raise the coverage of your existing policies. The Contractor umbrella policy usually raises the limits of your general liability, workers compensation, and automobile liability based on the extended coverage that you purchase. This coverage is particularly crucial for independent contractors with significant assets, unique job requirements, or other unique circumstances that could result in larger expenses in cases of emergency.

Contact Illinois Insurance Center for a free quote for Contractors Insurance in Illinois.