Contractors today face more risk than ever before. Insurance is a great tool for transferring risk but it also represents a significant expense to contractors. Contractors should seek to avoid and manage risk to protect their profit and their business. We can help. We assist our clients with avoiding risk, and potential claims to reduce their insurance premiums and losses.
Since our inception, Guardian Brokers, Ltd. has been committed to the insurance for the construction industry, serving general contractors and subcontractors.
Our Contractor’s Insurance Practice focuses on:
- Alternative Energy
- Drywall & Plaster
- General Contractors
- Steel Erectors
And many more…
To find out more about our construction insurance program and what we can do for you, contact us today!
While contractors may consider many types of insurance coverage the following are typical insurance types carried by contractors.
General Liability Insurance
This liability insurance will protect you from most claims that would arise from the day to day activities. This includes the activity of running a business and the type of accidents that would occur at a job site.
Tools and Equipment/Inland Marine
Contractors often carry coverage for small tools used in their operations. Each of these ‘unscheduled’ items are limited to a small defined value and there is a maximum amount for any one claim or policy. More valuable items are scheduled individually with a defined limit for each.
Builders Risk – C.O.C (Course of Construction)
Physical damage insurance for property under construction. Lenders will require it before issuing construction financing. They will usually require this coverage before funding remodeling projects as well and some policies can be endorsed to include the structure being remodeled also.
Workers Compensation-See our Workers Compensation page
Contractors are responsible for providing this coverage for employees but may also have the exposure because of subcontractors who have not provided workers’ compensation insurance for their employees. This exposure can be avoided by insisting that subcontractors carry appropriate workers compensation insurance.
Business Auto Insurance
Personal auto policies exclude autos used for Commercial and Business purposes and would, therefore require coverage on a policy designed for such use. If you use your automobile in business be sure you have the right policy and coverage is not excluded.
Payment and Performance Bonds or Contract Bonds
Payment and Performance bonds are typically required together, which is why it is common to refer to them together as a ‘performance and payment bond.’
Performance bonds guarantee the completion of a specific contract. Payment bonds guarantee subcontractors and material suppliers will be paid.
Like all surety bonds, contract bonds act as a three-way agreement between the principal (contractor), the obligee (the government entity, owner or a client) and the surety bond company providing the bond.
The performance bond is meant to protect the obligee in the case of principal default due to delays, inability to complete work on a project, or other performance issues. In the case of a legitimate claim brought up against a contractor, the surety steps in and resolves the claim.
While the sides receiving compensation in the case of a payment bond claim are subcontractors, suppliers and laborers, it is the project owner who is the obligee thant needs protection against claims by those parties in the case of contractor default.
If, for some reason, a contractor doesn’t pay those parties within a reasonable timeframe, a claim can be made against the bond. The surety who issued the bond then steps in and takes care of all pending financial obligations of a contractor towards those parties.