Types of Insurance Contractors Should Get

If you own a company, you need to ensure that you have sufficient insurance so that you won't suffer monetary consequences if something goes wrong. Even if you know that insurance is important for your business, you might not know just what kinds you need to be fully protected. Learn more about some of the different kinds of insurance you could benefit from.

Worker's compensation insurance serves multiple purposes. First, it pays for the medical expenses of any employees who are injured because of their job. Second, it can shield your company from lawsuits about these kinds of injuries. Not all injuries are covered, but the ones that directly pertain to work and mandatory functions while employees are not under the influence of any substances are typically covered.

This type of insurance is required regardless of the kind of business you own. If you have any employees, with very few exceptions, the State of Illinois requires that you carry worker's compensation insurance for each one. This applies even to part-time employees. If you're not sure if your company might be an exception, consult a lawyer or an insurance company about what your best course of action is.

While other types of insurance may not be required by state law, they are still important to have. Liability insurance is one such type. If you accidentally damage your client's property — a problem much more likely to arise if heavy machinery or tools are used around a client's property rather than if you provide another service, such as tax filing — or if one of your employees is accused of sexual harassment, you'll want to have this insurance in place. 



In addition to providing lawyers and funds to fight a lawsuit if you, your company, or your employee is not actually in the wrong, this insurance can provide the means for any settlements or judgments brought against you. 

Commercial property insurance covers your business's property, such as landscaping materials and tools that could suffer damage, in addition to any buildings you own. This kind of insurance can protect you against weather problems and various accidents that could occur on your business premises.

Contractors often need to transport tools and other materials to various job sites, so vehicle use is common in contracting as well as in other industries. If you use vehicles to run your business, such as a truck or a company car, you'll need commercial auto insurance. Commercial insurance offers many of the same protections as personal insurance does, such as liability coverage, comprehensive coverage, and uninsured motorist coverage, but personal car insurance typically won't cover vehicles used in the course of business. 



Get commercial car insurance as soon as possible if you use any vehicles for your business, including both company and personal vehicles used for the course of business. 

If your contracting company has anything to do with building new properties or reconstructing old structures, you'll probably want builder's risk insurance. This kind of insurance is designed especially for contractors because it covers the project you are working on rather than the tools you use in the course of your business, which means you won't need to shoulder that risk yourself. Builder's risk insurance can encompass a lot of different types of coverage, such as the following.

While this type of insurance typically doesn't offer protection against natural disasters — you'll need additional coverage for that — the structure you are working on will be protected against the vagaries of weather, such as high winds that ruin landscaping or knock new windows out of a building. 

Fire damage is a threat that, while seemingly uncommon, can wreak havoc on a property when disaster does strike. Fire is hard to predict and costly to clean up after, so you assume a huge risk if you're not protecting your projects from fire damage.

While the risk of vandalism and theft may be higher in areas with high crime, even in a relatively safe neighborhood, a construction project can carry that risk. If you are insured against it, however, you don't stand to lose money if something is stolen or part of your project is destroyed by passing wrongdoers.

One great way to get all these types of coverage is to ask your insurer about contractor insurance. Rather than a single insurance policy that only covers contractors, contractor insurance is a package of the various insurance types that a contracting company typically needs. 

Whether you're a landscaper, a builder, a roofer, or some other type of contractor, you can benefit from multiple types of insurance coverage. If you're not sure what your specific company needs, contact our team at Illinois Insurance Center. We have served the Chicago, IL, area for more than 48 years with our insurance protection services.