New Venture Contractors Insurance

If you're new to the contracting business, or if you're expanding your existing business into new territory, you'll need to take a look at your insurance coverage. Whatever the scale and scope of your new venture, contractors insurance is an essential part of your business plan. When building a new venture contractors insurance portfolio, you'll need to address a variety of areas and policy types. The best way to ensure that you're getting the coverage you need for all areas of your operation is to consult an insurance professional. However, there are certain guidelines every new venture contractor should follow when researching and acquiring insurance coverage for a business.

Know the Minimum

In many states, contractors are required to possess certain types of insurance in minimum amounts. Nearly every business with employees is required to have a worker's compensation policy, as well as a disability policy to cover employees who are injured on the job. Also necessary to any new venture contractors insurance portfolio is a comprehensive general liability insurance policy in an amount sufficient to comply with state or municipal regulations and also with the policies laid out by clients in future contracts. If you intend to pursue federal, state or municipal contracts, an insurance professional can help you ensure that you have all the coverage required to pursue those contracts. Although proof of insurance is not necessary to place a bid for most jobs, it is essential once the contract is approved, and having adequate general liability coverage helps to streamline the approval process.

Any contractor embarking on a new venture has likely invested a significant amount of time and money against future jobs. Equipment, supplies, even documents are significant assets and should be protected by comprehensive new venture contractors insurance. In addition to a general liability policy, some companies offer separate insurance policies to address domestic and international builders' risks. These policies cover materials, equipment, and machinery both on the job site and in transit, as well as protection against mechanical or electrical breakdowns, sinkholes, collapses, and other variables which may affect a project prior to its completion and which are not usually addressed in a general liability policy. A new venture contractors' insurance portfolio might also include environmental insurance, and railroad-specific insurance for projects involving or in proximity to active rail lines. Political risk insurance covers projects scheduled in foreign countries, or projects that rely heavily on materials produced in or shipped through foreign countries.

Bonds Insurance

Bonds are an important part of any contractor's business, and are a requirement in many contracts. Bonds can be obtained through most commercial insurance agencies, although it's a good idea to consult you insurance professional to find the issuing company that will best serve the needs of your business. Bonds are not technically a form of insurance, but are more likened to a type of credit. If a contractor defaults on a bond, they are liable for the full dollar amount of that bond, just as if they had made a cash guarantee to the client.

The benefit of using bonds as a form of surety is that there is usually no collateral required to obtain a bond, where a cash guarantee would require assets to be frozen in an escrow account for the duration of the contract. Some types of bonds common in the contracting business include bid bonds, which guarantee that a contractor who bids on a project will accept the contract offered if theirs is the chosen bid; payment and performance bonds ensure that the contractor will complete the project in a timely manner and in compliance with the terms laid down in the contract; labor and material payment bonds, also known as contract bonds, ensure that the contractor will pay his employees/subcontractors/ independent contractors all moneys due them upon their completion of the contracted work; and maintenance bonds, which deal with the contractor's maintenance of a finished project or property for terms greater than the standard one year of liability. There are also bonds that address employee fidelity, also known as employee dishonesty bonds, designed to protect the contractor's monies and documents from employee theft or forgery.

If you're a new venture contractor, insurance should be among your foremost concerns - but obtaining the right coverage needn't be time-consuming or stressful. An insurance professional from contractorsinsurance.org can help you find the coverage you need at a price that won't compromise your new venture. No matter what degree of contractors' general liability insurance coverage you require, we can help you find excellent coverage for the right price. For more information, click for a free quote or call our insurance specialists at (516) 294-1072 today.