Common Questions About Contractor Insurance

Bancorp Insurance has been insuring contractors in a variety of trades for over 35 years.  Over time, we see several common questions about contractor insurance that we’d like to review and answer for you.

Common Questions About Contractor Insurance

When you are in need of Contractor insurance, your first thought might be to contact your personal auto insurance carrier.  This might be a main carrier like Farmers, State Farm, Allstate or Progressive.  These agents generally only represent that one carrier’s product, which could limit your access to quality affordable coverage.  However, it could be to your benefit to work with an independent insurance agency like Bancorp Insurance.  

How do I find an agent for contractor insurance?

Bancorp Insurance works strategically with a variety of carriers that have various appetites for contractors within various niches.  This allows us to create a comprehensive insurance program that fits your unique business needs without breaking the bank.

You might even go online through a direct carrier, but you would be doing your business a disservice. You might be a cabinet carpentry pro, but most business owners do not even try to pretend they are professional insurance agents, so why should you? Chances are if you are buying your insurance online without help you might be missing an important coverage. Don’t find out you have been getting a killer deal on your contractor’s insurance because you don’t have the correct coverage after a denied claim!

Do it right the first time and call Bancorp Insurance and start to build a group of professionals who support you and your business as you grow and succeed. Plus, no one wants to call a 1-800 number when they have an important insurance question, work with one of our agents and know you have someone you can call about all your business insurance needs.

P.S. Industry Secret, we work with a lot of the online carriers too. So, we might be able to get you a killer rate and make sure you have all the coverage your contractor insurance needs.

Should I buy Liability Insurance, Bond and Workers Compensation at the same time?

Bundling is always going to benefit the contractor in terms of ease of access to their policies with one agent.  Your agent is going to be the most thorough at understanding your construction business and being able to recommend the coverages that you need overall.  If your coverages are spread out amongst various carriers across multiple agents, you could be leaving yourself open to potential voids in coverage.  Be sure to discuss all of your coverages with your agent to see what they might offer and get a quote.

Under what circumstances does my liability insurance cover workmanship claims?

As a general rule, General Liability insurance does not cover poor workmanship.  However, it does cover property damage resulting from negligence or poor workmanship.  For example,  you are hired to put in set of stairs going up to an attic apartment. You complete the project but a month later, someone is walking up the stairs and they collapse, injuring the person and damaging a car parked below.

The claim is turned into the insurance company who will defend you and pay for any liability you might have for injury to the person and damage to the car. However, it will not pay for the replacement of the stairs, because the stairs are your product and damage to your product is not covered by poor workmanship.

What are exclusions and how do they apply to a Contractor?

Exclusion situations are losses that are not covered by your standard General or Professional liability insurance.  There are some policies that will cover some exclusions, but it’s important to review your policy in detail with your agent to know what is covered and what is not. Common exclusions for contractors are:

The Your Work ExclusionClaims for Injury to Employees.  Workers Compensation ClaimsBusiness Autos: Should be covered on their own policiesEquipment- Which should be covered under Inland MarineTools – Which should have a separate tool coverage policyMultifamily dwellingsLimitations # of Houses in a SubdivisionEmployment related practices liabilityTrack HomesProfessional LiabilityMulti residenceWrap Program limitationSexual Abuse and MulestationAssault & BatteryComputer Data LossPollution, Seepage, Aspestos, and Lead

These are just a few of the exclusions that a policy could have.  It is important to review your specific policy with your agent to ensure that you have the coverage that your business needs.

How long do you need to maintain Contractor Insurance in Oregon?

Oregon’s statute of repose is 10 years from the date of your last project.  Continuing to carry General liability for this period of time will ensure that you are covered in the event a claim is filed.  Even in the years following your work. A minimum liability policy will cover defense costs, subject to a deductible.

What is completed operation insurance?

The Oregon CCB requires contractors to carry completed operations insurance.  This is an occurrence policy that covers losses based on the date of the loss.  This could be years after a project is completed.

If an occurrence happened due to your activity at a worksite after you have left a worksite this coverage would defend and would pay indemnity to the claimant.

How is my occurrence insurance affected if I switch insurance companies?

If you change Carriers during your coverage window and have occurrence-type coverage, there are no causes for concern.  In the event of a claim, the companies will subrogate to resolve.  Meaning, they will work out payment between themselves.

I’ve been a house painter but am thinking about adding the ability to do roofing.  Do I need to notify my agent?

YES!  Anytime your scope of work changes you need to notify your agent to ensure that you have the correct coverage.  Contractors are insured on their very specific trades.  Roofing, for example, has its unique set of risks and many insurance companies do not like this exposure.  Your agent can walk you through the various risks and discuss the types of coverage available to you. 

To avoid denials, increased premiums or the possibility of not being renewed you need to disclose all the types of construction work you perform to your agent.  Additionally, underwriters will perform periodic website and social media audits to ensure you are compliant.  You don’t want to risk not having the correct coverage.

My jobs are requesting a Certificate of Insurance, can I just use the same one over and over?

No!  While the basic information of your policy coverage might be the same, each specific job will request certain information to be discolsed on the COI.  Further, it’s a good opportunity to work with your agent on each job while you are bidding to obtain your COI, but also to review that you have the correct coverage for that particular job.  This can be a costly mistake for you if you don’t.

Further, if you are approached by a new GC and you reused a COI you could be missing required coverages or additional endorsements.  It’s a good idea to review the insurance terms with your agent before signing a new contract.  Don’t assume they are all the same.

Bancorp’s insurance agents are available to provide you with a free review and consultation of all your auto coverages to insure you are covered in the event of an accident.  Contact Us – Bancorp Insurance Call 800-452-6826

Disclaimer: This content is provided for general information purposes and is not intended to be legal advice or in place of consultation with an attorney. Changes may occur in this area of law over time.