Best Insurance for Civil Contractors  

5-Star Awards 2021: Construction Insurance

Civil contractors’ insurance is a collection of insurance policies that cover contractors on large projects. Examples of civil contractors include earthmovers, truck operators and commercial builders. 

5-Star Excellence Awards

  • Agile Underwriting
  • Burns & Wilcox 
  • Cansure 
  • CNA 
  • Intact Insurance 
  • Totten Insurance Group 
  • Victor Canada 

What type of insurance does a contractor need?  

One of the more common types of coverage for contractors is commercial general liability insurance, which protects against third-party claims for property damage or physical injury during contracting work. Commercial general liability insurance, beyond paying for compensation, will also cover any legal expenses during litigation.


Other types of insurance contractors may need, depending on the situation, include: workers’ compensation; contractors pollution insurance; automobile liability insurance; builders’ risk insurance; and roofers insurance.  


How much is insurance for an independent contractor?  

Larger companies may require different insurance coverage from independent contractors. A web designer working from home, for instance, probably will not need a policy for any employees or their business property.  


General liability insurance, the more common type of commercial insurance, will cost roughly $29/month in the U.S., or $344/year, according to TechInsurance. When coupled with commercial property insurance in a business owner’s policy, independent contractors pay roughly $42/month, or $500/year.  


Who needs contractors all risk insurance?  

If you are a tradesman or contractor, contractors all-risk insurance is an important policy to have in place. This kind of policy offers one of the more comprehensive methods for protecting the plant, equipment, and tools on a construction site, and is designed to protect against risks like vandalism, theft, malicious damage, floods, fires, and storms. A contractors all-risk policy, also called a CAR policy, also covers temporary buildings on-site like architects drawings, houses, and show home contents.  


While contractors all-risk insurance is not necessarily vital, it can be good to have to soften the blow of any unexpected damage, loss, or theft. Since they are essential to completing certain jobs, tools and equipment used by contractors can be very costly to replace or buy. Without the right tools and equipment, you could potentially miss out on new business – and therefore money earned.  


Because this type of policy provides comprehensive coverage in a single policy, you may want to consider a number of additional options, including: site clearance and demolition costs following a major insured event; engineers or other professional fees resulting from investigation of repairs; costs associated with the cleaning or clearance of drains; or coverage for insured items while in transit.  


How do I protect myself as an independent contractor?  

As a an independent contractor, these are some ways to protect yourself and reduce your potential liabilities: protect your social security number; have a clearly defined contract in place with clients and scope of work; get general/professional liability insurance; consider incorporating or creating a limited liability company, also known as an LLC; open up a separate business checking and credit card account; check with your city to make sure you have complied with any business license requirements; and save for taxes. 


What is covered by builders risk insurance?  

Builders risk insurance is a special kind of property insurance that indemnifies against building damage when under construction. Builders risk insurance protects an organization’s or a person’s insurable interest in fixtures, materials, or equipment for the renovation or construction of a structure or building, in the event that those items sustain damage or physical loss.  


Builders risk covers perils like theft, vandalism, fire, and wind, among many others, but usually doesn’t cover perils like flood, earthquake, or hurricane damage, unless they have been specifically included in the policy. Depending on the location of your project, however, earthquake riders can be very economical. Builders risk insurance doesn’t cover injuries and accidents at the workplace and typically ends when the work is done and the property is ready for use/occupancy.  


Do contractors carry builders risk insurance?  

There are many reasons why contractors should carry builders risk insurance. Here are 3 reasons contractors are best suited to carrying builders risk insurance for a construction project: 


Control of coverage. Builders risk insurance policies give rights to the first named insured, which includes responsibility to receive certain communications, to pay premiums, and, in certain cases, to serve as the sole agent for other insured parties. Since the contractor controls most other aspects of the construction project, it makes sense to give the contractor that responsibility. As well, by placing the policy in the contractor’s hands, coverage can address things before they become an issue for the owner, should loss occur.  


Certainty of coverage. Builders risk insurance has various optional coverages which may be overlooked by the standard insurance buyer or professional, and those coverages can make or break the value of a builders risk policy. These optional coverages can be added to the builders risk insurance policy by sophisticated contractors and qualified insurance professionals to increase the policy will respond to a claim.  


Advantageous terms and conditions. It makes sense that contractors are regular customers of builders risk insurance carriers compared to developers or owners, given that contractors are engaged in the business of constructing projects. Due to this, contractors secure more favourable terms and conditions from carriers. Additionally, contractors that establish robust builders risk programs have much better coverage terms, conditions, and pricing available for support projects.  


Do you need builders risk insurance for renovations?   

For any major home renovation or construction, homeowners should have builders risk insurance. Actually, a lender will usually need proof of a builders risk policy if the project is being financed. Smaller jobs where the homeowner is still living in the house during the renovations or construction work are usually covered by a home insurance policy, instead of a builders risk. It is important to check with your home insurance agent to see if you are covered under your homeowners policy for projects like renovations and small additions. If you are not covered, builders risk will come in handy.  

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