4 Steps To Take When Buying Insurance For Contractors – Our Guide

hard hat, safety hat, construction

Contractors in the construction industry are often faced with inevitable risks. Whether a general contractor, sub-contractor, electrician, plumber, or carpenter, one may possibly encounter some safety risks involved in their scope of work. For this reason, you, as the employer, should provide them with some forms of quality protection. That is where business insurance comes into the picture.

Business insurance serves to protect you from any liabilities and your contractors from financial losses should any untoward incidents happen. However, it’s critical to get the right insurance coverage from the best insurance provider.

In this article, we will share with you four steps to take when shopping around for insurance policies for your contractors:

1. Determine and Evaluate Your Risks

The first step is to determine and assess the risks faced by your contractors in the construction industry, which is why you have to study what your area of specialization is as a business. Along with this is understanding the scope of work of your employees on a daily basis.

Factor in as well the tools and equipment and the protective gear that they use to protect themselves while working. From there, you can set out a comprehensive risk management plan and getting the appropriate business insurance for your workers.

2. Have a Basic Insurance Foundation

Now that you have assessed the risk involved in the scope of work, you have to establish a solid insurance foundation. This means providing the basic coverage for your contractors, which is general liability coverage.

Also known as the Commercial General Liability (CGL), this coverage ensures protection against bodily injury and property damage. Injuries and property damages are common in the construction industry. So, when your workers get injured or accidentally burst a pipeline, the CGL will step in to cover the costs and damages.

3. Consider Expanding Such an Insurance Foundation

Once you have a solid insurance foundation, consider obtaining additional coverages for your workers. For instance, if you operate more than one construction site, invest in an umbrella policy, which serves as a supplement to the CGL discussed earlier. Know that the CGL policy may have some limitations in terms of benefits, which is where the umbrella policy steps in to go beyond the limited benefits.

electrician, wiring, installation

4. Add and Focus On Specific Protection

Today, contractors wear various hats at once – from planning to designing down to the actual construction. When some workers even perform electrical work, HVAC maintenance, and plumbing services, they are presented with additional risks. Because of this, the basic and even supplemental insurance won’t suffice.

You will need to have some form of coverage that is specific to their needs. For instance, you may want to consider a builder’s risk policy to protect the owner, the general contractor, and the sub-trades. It can go as far as covering unlikely events, such as flood, fire, earthquake, and even theft.


Business insurance plays a vital role in many companies, particularly in the construction industry. It’s highly critical that you invest in the right insurance for your contractors obtained from the best insurance carrier. To do so, make sure to follow some of the valuable tips outlined above to make a difference in the lives of your workers!

We help businesses and contractors find the perfect insurance plan tailored to their specific needs. If you’re looking for business insurance for contractors, get in touch with us today to see how we can help!


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