Whether you’re a general contractor building a dozen homes a year or a one-truck trade working for GCs, you need liability, builders risk, equipment, and workers’ comp that match what your contracts actually require. Bailey Insurance Agency is an independent agency in Garner, NC, writing contractors across Johnston County through Erie Insurance and other carriers, with certificates out the same day.
A contractor insurance policy is an easy way to cover multiple risks without having to settle for a one-size-fits-all policy that could potentially waste money on coverage you don’t need. There are a variety of options available depending on what type of contracting work your business does. From general contractors to HVAC technicians, plumbers, carpenters, electricians, painters, and the like, contractor insurance may help provide your business with coverage and peace of mind. Here are some coverage options to consider in your contractor policy:
Contractor insurance isn’t one policy; it’s a package shaped to the trade. We write dedicated programs for each of these, and the page for your trade covers the coverages and risks specific to it:
Roofers, painters, and specialty artisan trades not listed: we write you too. The general contractor package on this page is the starting point, and we’ll tailor it to fit the needs of your business.
As part of your contractor insurance policy, general liability insurance may cover you against claims of damage or injury caused on-site or to visitors on your premises. Such costs can be immense, and general liability insurance is often mandatory if you want to bid for government contracts.
As a contractor, your business may be susceptible to many risks, such as claims due to bodily injury, property damage, personal injury, and more. And, if you hire other contractors to perform work on your behalf, you can be held responsible for any damage they cause on the job.
Commercial general liability insurance is an absolute necessity for every contractor. This type of protection provides broad coverage for premises, operations, products, and claims to third parties or property when you are deemed responsible and liable. It will also pay to defend any covered lawsuit or action regardless of its merit.
When a fire, theft, or another type of disaster strikes, your commercial property and everything within it can suffer a significant loss. This can have a detrimental effect on your business.
Commercial property insurance can help protect the property your business owns and leases, including things like equipment, inventory, furniture, and fixtures. Whether you own your building or lease your workspace, commercial property insurance can be purchased separately or can be combined with other necessary coverage to protect your business’ physical assets.
You’re constantly moving your tools from one job site to another, exposing your contractor business to potential loss due to damage or theft. And without your specialized tools and equipment, your job site may come to a screeching halt.
As a contractor, you need contractors' equipment insurance - a policy specially designed to protect your tools and equipment on the move. The policy will cover equipment for a variety of losses, including fire, explosion, vandalism, theft, collision with other equipment or objects and overturning. Unlike standard commercial property insurance policies, contractors' equipment insurance often covers losses caused by floods and earthquakes.
A building under construction is not covered under a standard building insurance policy or a home insurance policy since it is not a complete structure. As a contractor, you may be responsible for unique loss exposures related to buildings under construction such as the theft of building materials and high valued equipment such as generators and compressors.
Builders risk and installation insurance provides coverage for homes or buildings while undergoing construction, until they are completed. The policy covers the contractors’ interest in materials at the job site before they are installed, construction materials in transit designated for the contractors' equipment insurance–a policy specially and the value of the property being constructed until it is completed.
If one of your employees receives an injury or becomes ill due to a work-related occurrence, you are required by law to have the proper coverage in place.
Workers' compensation protects your employees should a job-related injury or sickness occur during the course of employment. This coverage is required by law and may vary by area, so be sure that you understand your obligations for all physical locations where your business operates in and all physical locations where you hire your employees.
As a contractor, you have many exposures associated with your business vehicles–owned or leased. With a fleet of cars, trucks, vans, or other types of vehicles used in the course of business, a single accident can potentially put your contractor business in financial jeopardy.
Business auto insurance provides coverage for vehicles owned or leased by a contractor and provides coverage for bodily injury, property damage, and other exposures, and could include comprehensive and collision coverage as well.
If you are performing as a contractor on a construction project where other contractors and vendors are involved, you could be held liable for any damages or injuries caused by the other contractors or vendors, leaving you with costly legal fees and settlement costs. Your business needs to be protected against the risk of some other company, vendor or subcontractor causing damage to people or property of your mutual customer.
Consider having a contract in place with each entity that includes a hold harmless agreement in your favor. A hold harmless agreement provides that the entity will hold you harmless for any injuries or damage caused by their negligence. In addition, the contract should require that the entity list you as an additional insured on their policy. This may provide you with coverage under their policy for injuries or damage they cause if you are named in a lawsuit.
Losses and lawsuits are quite common in the construction business, and settlements can be substantial. If your business is found to be responsible for damage or injury on the job site, you could be facing a large liability loss that exceeds the basic limits of your standard policy.
You should consider purchasing a commercial umbrella insurance policy which provides higher limits, typically between $2,000,000 and $10,000,000, and often broadened coverages. Coverage is extended over various policies, including general liability insurance, business auto, and directors and officers liability insurance.
You should also make sure that you protect your stock, machinery, and equipment against damage or loss from fire, theft, flooding, and other risks—both on-site and off-site. Just as important, you need to have insurance coverage against loss of income if you are unable to carry out work because your equipment is damaged, breaks down, or is stolen.
Remember to also get workers’ compensation insurance, which is usually mandatory and helps protect employees against lost income and medical bills resulting from workplace injuries. You might be worried that the costs of a workers’ compensation policy will be high given the inherent risks of construction work, but many insurers may offer discounts if you follow safety programs.Do you need contractor insurance to protect your contracting business? Contact us to go over your business needs and coverage options.
General contractor licensing. Projects of forty thousand dollars or more require a license from the North Carolina Licensing Board for General Contractors. Licenses are tiered by single-project value: Limited (up to seven hundred fifty thousand dollars), Intermediate (up to one million five hundred thousand), and Unlimited. The board does not require insurance to obtain or hold a license; a surety bond is only an optional alternative to its financial-responsibility standards. Trade licenses for HVAC, plumbing, and electrical work come from separate boards and likewise don’t require general liability.
Workers’ compensation. Required by law for any employer with three or more employees, and corporate officers and LLC members count toward that number unless they’ve elected out.
The subcontractor rule. Under North Carolina’s workers’ compensation statute (section 97-19), a general contractor is liable for workers’ comp benefits owed to the employees of any subcontractor that doesn’t carry its own coverage. Collect a certificate of insurance from every sub before they start, and keep it on file for your annual premium audit; uninsured sub payments get added to your payroll at audit if you can’t produce one.
Everything else comes from your contracts. Liability limits, additional insured status, waivers of subrogation, primary-and-non-contributory wording, umbrella requirements, and builders risk responsibility are all set by the owners and GCs you work for. Send us the insurance exhibit before you sign; we’ll tell you what your policy needs.
Read more: General Contractor Insurance in NC: Licensing, Liability, and the Subcontractor Rule
Bailey Insurance Agency is an independent agency in Garner, NC. We write contractors through Erie Insurance, which has a well-established contractor program in North Carolina with the ongoing and completed-operations additional-insured forms most contracts require, and through other carriers when an account fits better elsewhere. We insure general contractors and trades across Garner, Clayton, Smithfield, and Johnston County, from one-truck operations to builders putting up a dozen homes a year.
When you need proof of coverage, current clients can request a certificate of insurance and routine certificates go out the same business day. Here’s how certificates, additional insured status, and waivers actually work: Certificates of Insurance for Contractors.
Building or financing a project? Builders risk is the policy that covers a structure before it’s finished, and who buys it is set by contract: Builders Risk Insurance in NC.
Workers’ compensation is required by law at three or more employees. The general contractor licensing board does not require insurance to hold a license. General liability, auto, umbrella, and builders risk are required by contracts, lenders, and customers.
Coverage for bodily injury and property damage your operations or completed work cause to third parties. It does not pay to redo your own faulty work. Most contracts require one million dollars per occurrence and two million aggregate.
In North Carolina, yes, if the sub is uninsured. Collect a certificate of insurance from every subcontractor before work starts.
The construction contract decides. General contractors usually carry it on new residential builds; owners often carry it on custom homes they finance and on large commercial projects.
General liability is rated on revenue and type of work; workers’ comp on payroll by class code; builders risk on project value and duration. Costs vary widely by trade, subcontractor use, and claims history, so we quote across multiple carriers.
Current clients can request one through our service center and routine certificates go out the same business day. Certificates that require a new endorsement take longer because the policy has to be amended first.
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