Contractors Insurance And Auto Accidents: What's The Verdict?

Contractors' insurance is a non-standard insurance policy that covers property damage and third-party injury or damage claims. It is designed to protect contractors from financial losses resulting from claims or lawsuits filed against them. While it covers a range of scenarios, it is important to note that contractors' insurance typically does not cover auto accidents. Instead, auto accidents are usually covered by commercial auto insurance, which is required in most states for any business-owned vehicles. This type of insurance covers legal bills, medical expenses, and property damage resulting from an accident involving a company vehicle. Therefore, if a contractor is involved in an auto accident while driving a company vehicle, it is the commercial auto insurance policy that would come into effect, rather than the contractors' insurance policy.

Commercial auto insurance for contractors

Commercial auto insurance is a requirement in most states for any business-owned vehicles. This type of insurance is important for contractors who use vehicles for business purposes, as personal auto insurance policies do not cover business-related accidents.

Contractors need commercial auto coverage for things like transporting tools and supplies, travelling between job sites, and making deliveries. Commercial auto insurance covers legal fees and other expenses if a business-owned vehicle is involved in an accident. It also covers damages to your business vehicles and any injuries or damages that may occur in an accident involving one of your business vehicles.

If a contractor is driving a vehicle owned by your business, you should ensure they are covered in case of an accident. If they are often driving their own business vehicle, it's a good idea to ensure they have their own commercial coverage in place. You could ask your contractor to show a certificate of insurance as proof of coverage.

Commercial auto insurance costs an average of $147 per month. The cost is based on several factors, including the vehicle type and value, the level of risk involved, employee driving records, and policy deductible and limits.

Contractor liability insurance

In addition to general liability insurance, contractor liability insurance can also include professional liability insurance (also known as errors and omissions insurance). This type of insurance covers mistakes and oversights made by contractors when carrying out professional services, such as IT security work or consulting. It can help cover legal fees if a customer sues over unsatisfactory work or failure to meet a deadline.

For contractors who own or regularly drive a vehicle for business purposes, commercial auto insurance is essential. This type of insurance covers legal bills, medical expenses, and property damage resulting from auto accidents involving company vehicles. It is required in most states for any business-owned vehicles.

Overall, contractor liability insurance is designed to protect your business from financial losses and lawsuits that can arise from unexpected events or accidents. It is an important consideration for any small business owner or independent contractor to ensure they have the necessary coverage to protect their assets and employees.

Accidents covered by contractors insurance

Accidents covered by contractors' insurance depend on the type of insurance policy held by the contractor. Contractors' All Risks (CAR) insurance is a non-standard insurance policy that covers property damage and third-party injury or damage claims, the two primary types of risks in construction projects. CAR insurance also covers damage to temporary work erected on-site, as well as damage during renovations. It bridges the gap between exclusions that would exist if separate policies were used. Risks covered under CAR policies include flood, wind, earthquakes, water damage, mould, construction faults, and negligence.

General liability insurance, which is included in CAR policies, covers third-party accidents such as customer injuries or property damage. It also covers advertising injury and is often required to sign leases and contracts.

Commercial auto insurance is required in most states for any business-owned vehicles. It covers legal bills, medical expenses, and property damage resulting from an accident involving a company vehicle. Hired and non-owned auto insurance (HNOA) is a type of commercial auto insurance that covers personal, leased, or rented vehicles used for business.

Workers' compensation insurance covers work-related medical costs and lost wages resulting from work-related injuries and illnesses. It is required in most states for businesses with employees and is often necessary for independent contractors in riskier professions.

Contractor insurance for small businesses

Small businesses that hire contractors may need to provide some types of insurance for them, in addition to their own business insurance. This is to ensure that the contractors' liabilities and the business's liabilities are covered.

Commercial Auto Insurance

If your business owns vehicles, you will need commercial auto insurance in most states. This covers legal bills, medical expenses, and property damage in the event of an accident. If a contractor is driving a vehicle owned by your business, they should be covered by your commercial auto insurance. If they are driving their own vehicle for business use, they may need hired and non-owned auto insurance (HNOA). HNOA offers liability protection for the self-employed, independent contractors, and small business owners when they use their own car or a leased or rented vehicle for work.

General Liability Insurance

This covers common business risks like customer injuries, customer property damage, and advertising injury. It is often required to sign leases and contracts, and you may need to show a certificate of liability insurance as proof of coverage.

Business Owner's Policy (BOP)

A BOP combines commercial property insurance and general liability insurance policies, usually at a lower cost than buying them separately.

Professional Liability Insurance

Also called errors and omissions insurance, this covers mistakes and oversights that contractors make when carrying out professional services. For example, if a customer sues over unsatisfactory work or a missed deadline, professional liability insurance would help cover legal fees.

Workers' Compensation Insurance

Workers' compensation insurance is required in most states for businesses with employees, and in some states for independent contractors. It covers medical costs and lost wages from work-related injuries and illnesses.

Artisan and Service Contractors Insurance

This type of insurance is for small businesses that provide services such as electrical work, lawn care, or carpentry. It covers damage to on-site property, on-premises injuries, and theft of tools.

Contractors' All Risks (CAR) Insurance

CAR insurance is a non-standard insurance policy that covers property damage and third-party injury or damage claims. It is typically taken out jointly by the contractor and the employer, and it covers all parties on a project. It is common for construction projects involving buildings, water tanks, sewage treatment plans, flyovers, and airports.

Contractor insurance for large businesses

Contractor's All Risks (CAR) insurance is a non-standard insurance policy that provides coverage for property damage and third-party injury or damage claims, the two primary types of risks on construction projects. This type of insurance is designed to cover all parties involved in a construction project, including the contractor, employer, financing companies, subcontractors, and more.

Large businesses should consider CAR insurance to protect against financial liability due to property damage or injuries that may occur during construction projects. This type of insurance can provide peace of mind, knowing that your business is protected in the event of unexpected incidents or lawsuits.

In addition to CAR insurance, there are several other types of insurance that large businesses may want to consider for their contractors:

• Commercial auto insurance: This type of insurance is required in most states for any business-owned vehicles. It covers legal bills, medical expenses, and property damage in the event of an accident.
• General liability insurance: This covers common business risks such as customer injuries, customer property damage, and advertising injuries. It is often required for signing leases and contracts.
• Professional liability insurance: Also known as errors and omissions insurance, this covers lawsuits related to work mistakes, oversights, and negligence.
• Workers' compensation insurance: This is required in most states for businesses with employees and can also be important for independent contractors, especially in riskier professions. It covers medical costs and lost wages resulting from work-related injuries and illnesses.
• Commercial property insurance: This type of insurance offers financial protection for your business workspace and its contents, including tools and equipment. It is often required by landlords to sign a lease.

Large businesses should work with an insurance agent to determine the specific types of insurance coverage needed for their contractors, as requirements and risks can vary depending on the industry and location.

Frequently asked questions