Contractors Insurance discounts and questions
The policies a trade or general contractor needs to hold a license, sign a subcontract and get on a job site: general liability with completed operations, tools and equipment, commercial auto, workers compensation and the license bond, matched to what the board and the GC ask for.
Discounts carriers commonly offer
- Package policy
- General liability, property and inland marine written together with one carrier, usually as a contractors package or business owners policy.
- Experience modification credit
- A workers compensation rating factor below one, earned by a claims history better than your trade's expected losses.
- Written subcontractor agreements
- Collecting certificates and indemnity agreements from every sub, which lowers the liability rate and prevents audit charges.
- Fleet safety and telematics
- Driver record checks and tracking on company vehicles.
- Higher deductibles on equipment
- Taking a larger deductible on the tools floater in exchange for a lower rate on scheduled items.
Questions people ask
What does the licensing board actually require me to carry?
The boards in each of the four states require a license bond for most classifications, and some require proof of workers compensation or an exemption filing before the licence is issued. General liability is not always a licensing condition, but it is a condition of nearly every contract you will sign. The requirements and bond amounts are published by each board; send us your classification and we will match the package to it rather than guessing.
The general contractor wants to be an additional insured. What does that mean?
It means your liability policy will defend and pay for the general contractor when they are sued because of your work. It is granted by an endorsement, either naming them or by a blanket endorsement that covers anyone your contract requires. Contracts also ask for the ongoing and completed operations versions, primary and non-contributory wording, and a waiver of subrogation. Each is a separate endorsement with its own small charge, and the certificate must match what the policy actually carries.
I work alone. Do I still need workers compensation?
Rules for sole proprietors differ by state, and a contractor with no employees may be able to file an exemption. The practical answer is often set by the general contractor, who may refuse a sub without a policy because your payroll would otherwise be charged to theirs. A minimum-premium policy or a ghost policy that names you but excludes you as an owner can satisfy the contract at a small cost; the analysis compares the options.
Are my tools covered under my truck's insurance?
No. A commercial auto policy covers the vehicle and permanently attached equipment, not the tools inside it. Theft from the truck is a claim on the tools and equipment floater, which is why that policy asks whether the vehicle is locked and where it is parked overnight.
What is a builders risk policy and do I need one?
Builders risk insures a structure while it is under construction, against fire, theft of installed materials, wind and vandalism. On a new build or major remodel it is bought by the owner or the general contractor for the project term, and the contract says which. Trade subcontractors usually do not buy it, but should confirm the project carries it before storing materials on site.
Why did my workers compensation audit produce a bill?
The policy is priced at the start of the year on estimated payroll and trued up at the end against actual payroll and the certificates you collected from subs. Payroll higher than estimated, a crew classified in a higher-rated trade, or subs with no coverage of their own all add premium at audit. Keeping certificates on file and estimating payroll honestly at renewal removes most surprises.