Closely-Guarded Secrets of Contractors Insurance…

When you talk about insurance it can become over whelming because let’s face it we are all at the mercy of our insurance agent.Now I do not know about you,but do you read all that fine print that’s on all them forms.Not-a chance!

Now think about your home and car insurance and now your a contractor and you need to cover all your assets plus let’s look at some other insurance you will need.

1.Contractors Liability Insurance is something you can’t go without.This is required to get building permits and covers you not only on your job sites but covers you at your place of business.

Now this is were you can get caught up and waste a lot of money.Let’s stop and think about some things for a minute.Take some time to add up all your assets both for business and personal.

See your insurance coverage amount needs to grow as your assets grow.Let me give you an example.Let’s say that your business and personal assets add up to $250,000.You are with your insurance agent and they want you to have 2 million of liability.Why? I could see at most maybe 1 million.

The rule pending on your type of contractor you are is 2 times your net worth or in this case $750,000 of coverage.Sometimes it is cheaper to just buy the minimum, but then buy an umbrella policy and by doing this it’s cost less in the long run.

The umbrella policy only kicks in if you have a major accident.But you are covered and you are saving money also.Your agent will not talk about this because they do not make as much.

A good rule of thumb is to check twice a year on all your insurance needs.So every 6 months put this on your calender to check out.

So with having a $750,000 main policy and then have a 1 million umbrella policy you can save up to 1/3 to 1/2 the premium cost.So put your thinking cap on when it comes time to buy contractors insurance.

NOTE: This is only my opinion and my experience for the past 25 years of buying business insurance.Have your lawyer give you professional advise when purchasing insurance.

2.Contractors Health Insurance is important for you and your family and all your employees.Now pending the state you are in business in ,you may need to pay up to 75% of the premium policy cost.Yes this is the cost of doing business.

If you are able to hire a younger person then your policy cost would be less.But again check the legality of all this with your lawyer, because you do not want to discriminate.

I have used professional employer leasing companies in the past because when you are in a larger group they are able to spread the cost out evenly and no matter if you have a precondition they will still cover you most of the time.

Again this is something to shop around for.Remember your customers will get 2-3 estimates for your work so make sure you do the same when looking for all your contractors insurance needs.

Keeping good records of your contracting business is a must because all the insurance companies look at your sales total to figure your policy amounts.

One thing to remember is to NEVER play with your sales totals just to save money on your insurance policy cost.[yes I have seen it happen]

I hope I have helped you with your contractors insurance questions but also please check with your lawyer for his professional advise because it can be costly if you do not purchase the right policy and coverage.

Happy Selling

Glen