Does your company hire subcontractors? Then you need to make sure that your subcontractors are insured and that your business and other assets are protected.
What is Construction Insurance?
Construction insurance is designed for anyone who hires subcontractors, whether you are a business owner bringing in extra talent or you are a contractor yourself and bringing extra help.
Trade artisans such as electricians, HVAC technicians, plumbers, roofers, carpenters, and similar professionals all hire subcontractors on occasion and construction insurance is designed to cover the subcontractor in case of injury or professional liability or damages as well as the person or company who hired them.
Anyone who does physical work and hire subcontractors to complete all or part of that physical work should carry construction insurance.
Why Do You Need Construction Insurance?
Subcontractors need to be protected from liability and the risks associated with their work.
If you are a business owner or general contractor in any field, you are the person or entity responsible for completing the project to the client’s satisfaction.
For instance, a contractor hired to repair, build, or renovate a property, you may hire trade artisans or specialists to complete specific aspects of the project; e.g. HVAC techs, plumbers, electricians, or other subcontractors with specialized skills.
However, despite hiring the subcontractors, you are the one liable for their safety and their ability to complete the job, which makes having construction insurance a necessity for your – and their – protection.
How Do You Choose the Right Type of Construction Insurance?
You should start by looking at the types of work that your subcontractors perform and the risks associated with that work.
For instance, construction workers, house cleaners, and landscapers may be more expensive to insure than say, DJs or graphic designers.
More dangerous work that involves more heavy lifting may require more insurance coverage.
In addition, any work that involves the contractor visiting job sites or people’s houses or other property involves more risk and therefore might increase the cost of your construction insurance.
What Type(s) of Construction Insurance Do You Need?
The type of construction insurance that you need is based on the role of the contractors that you are hiring, the type of work they are doing, and where they are performing that work, e.g. in your office, at an event site, at a construction or client’s home or business, or wherever else you need them to be.
For instance, if you have a landscaping or lawn mowing company, than you need landscaping insurance to cover your subcontractors and any injuries they may sustain during the course of their work.
Same goes for handyman liability insurance, painters insurance, DJ liability insurance, HVAC contractors and cleaning company insurance.
Furthermore, if you have a business where your subcontractors go to your clientele’s homes or places of business, you may need to make sure they are bonded.
For instance, cleaning business insurance and bonding is particularly important, as it is for home contractors or even pet sitters, since these contractors are often alone in your clients’ homes.
How Much Does Construction Insurance Cost?
The general liability insurance cost for contractors tends to vary depending on the type of contractors that you hire, the sort of work they are required to perform and the conditions they are doing it in, and their rates.
General liability insurance may cover subcontractors, but you should always check with your insurance company before you assume that’s the case – you definitely don’t want to find after the fact if your subcontractor suffers an injury or there are other problems with the project.
Lack of subcontractor coverage can be a costly but easily avoidable mistake.
Note that the cost of general liability insurance for subcontractors tends to average around five hundred to eight hundred dollars per year, depending on your location and their trade.
What Other Types of Insurance Are Related to Construction Insurance?
General commercial liability insurance is related to construction insurance; in fact, your commercial liability policy may cover your subcontractors in some instances.
Ready to learn more about the best type of construction insurance for you?
Contact an ASCO Insurance Service specialist to learn more.