More and more people are trying their luck at becoming a contractor, and understandably so. After all, working as a contractor is, more often than not, light years better than just being an employee working a 9 to 5 job.
Being a contractor means you’re the boss. You could own the business entirely, or you may have partners, but the fact remains that you’re at the top. When you’re the boss, you’ll have better personal working conditions. Instead of coming in to work at a fixed time, you can come in whenever you want, and no HR officer will be taking down notes while glaring at you.
Also, owning a contracting company means your income will be higher than if you were just an employee. Once you get a steady stream of clients, you can expect the money to come rolling in, and much of it would be yours after expenses and fulfilling your obligations to your employees and the government.
The contracting industry, however, isn’t all about that. For all the perks that come in, the job of a contractor is one that comes with a ton of responsibilities. Purchasing contractor insurance policies is one of them. And it’s not just a moral responsibility. It’s actually a requirement that you must fulfill to protect your workers, clients, and business from the risks that come with contracting work.
Here are five reasons why you need contractors insurance
1. Protection from claims
As a contractor, you are responsible for the area in which you do your work. If someone gets injured within your area of responsibility because of an accident or plain negligence on your part, you can expect that person to file a claim against you. The same responsibility applies if you or any of your employees cause any kind of accidental or intentional damage to the property in which you’re working.
Why do you need protection? These claims could be substantial enough to shut your business down if you’re forced to pay for them out of pocket.
To avoid a disaster like this, you have to take out a contractors general liability insurance policy. Whatever financial liabilities you end up with, you can be sure that general liability insurance will cover them and help keep your business afloat.
2. Protection for your employees
Workplace accidents happen, especially in high-risk contracting jobs like roofing, where one wrong step could lead to an accident that results in an injury to the worker. The injured worker has every right to file a claim for their pain, suffering, and lost wages, and if you don’t have workers compensation insurance, you’ll be in trouble.
Almost all states require employers to get workers compensation insurance. This type of coverage is a win-win proposition. With workers compensation insurance, injured employees can get all the benefits due to them, and it wouldn’t matter who is at fault for the accident. On top of that, you will be spared from the cost and hassle of a lawsuit that the injured worker could file against you.
3. Pay for legal costs
Uninsured contractors often get hit hard by attorney’s fees, court expenses, and other legal expenses when someone files a claim in court. In case an interested party sues you in court, your contractors insurance policy should cover the legal costs a lawsuit will entail.
4. Boost your business’s commercial reputation
In the past, residential or commercial clients weren’t too picky about hiring a contractor for any project. As long as they’re able to see a contractor’s portfolio or get their name from a trusted friend or relative, they’d hire a contractor without any second thought.
With today’s smarter and more careful clients, contractors have to present more than just a valid portfolio. It has become standard practice for clients these days to conduct painstaking background checks on potential contractors.
With the internet and all other resources at their disposal, they can find out everything they need to know about a contractor — including whether or not that contractor has proper insurance coverage. They are also focused on hiring only those with the right contractors insurance because it protects themselves and their property as well.
When you get contractors insurance, don’t be shy about making it known through your own website and other marketing materials. It will give your reputation a boost and increase your chances of being hired for contracting jobs.
5. Get some peace of mind
Being sued for anything is incredibly stressful. You can only imagine how much stress a liability claim against you would cause. Obtaining contractors insurance is one of the best things you can do to avoid that kind of stress.
Do yourself and your business a favor, and get the right contractors insurance now before it’s too late.