The World of Artisan Contractors
Artisan contractors, also known as casual contractors, encompass a diverse range of skilled professionals who work with tools directly at customers’ premises. This category includes occupations such as carpenters, plumbers, electricians, roofers, and even tree surgeons. Additionally, it extends to skilled service providers like interior decorators, piano tuners, and exterminators.
Special Insurance Needs
Given the nature of their work, artisan contractors require specific insurance coverage that caters to their unique circumstances. This includes coverage for equipment and tools that are frequently moved around, as well as protection for the value of work done for a customer until it is completed.
To ensure the most cost-effective and efficient coverage, many artisan contractors opt for a Businessowners Policy (BOP) tailored to their specific needs. While these policies may be marketed under different names, they typically offer provisions similar to those found in a standard BOP.
Property Protection: Safeguarding Your Assets
The BOP provides coverage for real estate and other property owned by your business, specifically at the designated business premises. If your business operates out of a rented or leased space, the BOP also offers protection for any improvements or betterments made by tenants. These refer to fixtures, alterations, installations, or additions made to the space that cannot legally be removed from the landlord’s property.
However, the greatest risk for property loss typically lies in valuable machinery and equipment that moves from one job site to another. Unfortunately, such movable property is not covered by standard property insurance. Instead, insurers offer specialized contracts known as “floaters” to provide coverage.
For instance, an installer’s floater covers machinery and equipment during the transit, installation, and testing phases at a customer’s premises. It can even extend coverage to building materials, although it is more commonly used for equipment or machinery specifically installed by contractors, such as heating or air conditioning units. Insurance policies can be customized to cover a single job or implemented on a reporting form, where you provide information about each new contract you undertake.
To protect the tools and equipment used in your profession, a tools and equipment floater is essential. This policy ensures coverage for your property wherever it is utilized, encompassing hand tools, power drills, hoisting machines, power pumps, and more.
Liability: Your Shield Against Lawsuits
Given the potential for lawsuits arising from claims of harm caused by your work, obtaining liability insurance is crucial. This coverage safeguards you in the event that someone alleges damage or injury due to your professional activities.
If you are working as a subcontractor, your customer may require you to have Owners and Contractors Protective Liability (OCP) coverage. This type of policy protects property/business owners or general contractors from potential liability resulting from the negligent acts of independent contractors or subcontractors hired to perform work on their behalf. Although the actual purchaser of the policy is the independent contractor or subcontractor, the protection extends to the benefit of the property/business owner or general contractor for whom the work is being carried out.
Business Vehicle Insurance: Covering Your Work Wheels
While your personal auto insurance may provide coverage for some business use of your truck, van, or other vehicle, it is important to note that it is unlikely to cover vehicles primarily used for business purposes. Additionally, personal auto insurance does not extend coverage to vehicles owned by a business. To protect these business-owned vehicles, a dedicated business auto policy is necessary.
Consider this scenario: You personally own a truck that is primarily used for business purposes. In the unfortunate event of an accident where you are found liable, an injured party may sue you personally. It’s essential to evaluate whether your personal auto policy provides sufficient coverage to cover all potential damages. If not, your business could face a lawsuit. It is advisable to discuss your coverage limits with an insurance agent to ensure adequate protection for your business when using personal vehicles.
Workers Compensation Insurance: Protecting Your Most Valuable Assets
Workers compensation insurance is subject to varying rules depending on the state. As a small business owner with three or more employees, it is crucial to consult your state’s department of workers compensation to determine whether you are obligated to provide this coverage. Workers comp insurance serves as an essential safeguard, ensuring that your employees receive adequate compensation and medical benefits in the event of work-related injuries or illnesses.
Learn More About Insurance Coverage
Interested in finding out more about the specific insurance coverages mentioned in this guide? Here are the main areas to explore:
In conclusion, insuring your business as a small business owner is a multifaceted process. By understanding the unique insurance needs of artisan contractors and exploring the available coverage options, you can protect your valuable assets, shield yourself against potential lawsuits, and provide comprehensive protection for your business and employees. Remember, a well-insured business is a secure business.