You’ve worked hard to establish your business as a reputable commercial contractor. Or maybe you’re just starting out and working tirelessly to build your company. Either way, it’s imperative that you take the necessary steps to protect any assets belonging to you and your company, starting with buying subcontractor insurance.
What Is Subcontractor Insurance?
Subcontractor insurance is a form of business insurance that provides financial protection for your construction business in the event of a work-related incident.
Why Does a Subcontractor Need Insurance?
Subcontractors need insurance to protect the business from financial losses in the event of a lawsuit, along with other liabilities that could result from accidents or injuries to workers while on the job. It’s also mandatory in some instances, and you won’t be allowed to commence work on the project until you can prove that you have adequate coverage. Otherwise, general contractors or individuals overseeing projects may look elsewhere for contractors who are already insured.
How Much Does Subcontractor Insurance Cost?
It varies by your line of work, the level of risk it poses, and the number of individuals you employ and vehicles in use. Before offering a quote, insurance providers will also consider the level of coverage you’re seeking and your claims history.
What Does Subcontractor Insurance Usually Cover?
- Bodily Injury: injuries sustained by a non-employee on your job site, both during and after the job is complete
- Property Damage: damages caused by your team at the job site
- Medical Payments: these payments are covered by workers’ compensation if your employee is injured while on the job
Types of Policies Under Subcontractor Insurances
- General Liability Insurance Coverage: provides protection if damages to the job site or injuries occur on the job site (also known as Premises and Operations coverage) or after work is complete (also known as Completed Operations coverage)
- Workers’ Compensation Insurance: covers lost wages and medical costs for employees who sustain injuries or illnesses while on the job
- Automobile Liability Insurance: provides financial protection if your construction company owns or rents vehicles that are used for commercial purposes
- Contractor or Surety Bond: it’s typically required if you’re working on larger projects or public construction projects
Other Ways to Protect Your Construction Business Cash Flow Aside From Insurance
Ultimately, securing a subcontractor insurance policy is a good idea and can help protect your construction business from financial losses. It can also make your company more appealing to general contractors and result in more contracts for your company. Still, it isn’t the only way to shield your businesses from cash flow issues.
Materials and supplies needed to commence construction projects can also be costly. And if you’re unable to come up with the funds to cover the costs, you could be forced to scale back operations.
