In respects to contractors shopping for contractors insurance there are two type of contractors, what I like to call knowledgeable and learning contractors. The knowledgeable contractors tend to have some years of experience in searching out their contractors insurance policies while the learning contractors tend to be within their first couple years of business. The knowledgeable contractors get right to the point giving their agents precise information and looking for exact figures of coverage which ultimately makes them easier to work with while the learning contractor can be difficult to be able to cover properly. Insurance is a language that some find hard to understand so the learning contractors don't seem to articulate their needs very well to their insurance brokers which leaves room for errors. As insurance brokers, part of our job is making sure to protect our contractors to the best of our ability and to help educate them as to what insurance might best be suited for their particular needs. For this to happen, both the contractor and the Insurance Agent need to be on the same page. Here I will go into some of the key points that I feel will help contractors find the best insurance quotes available from their Agent or broker.
First you will need to get an idea of what you are looking to insure. All contractors insurance policies are not the same. A painting contractor in Oregon might not require the same type of insurance policy as a General contractor would in California. Stop and ask yourself what it is exactly that you do. Think about what could go wrong in your operations. Find out if your state has construction defect laws that directly affect your type of work. Contact your state or local licensing agency to find out about any warranty that they require of your products after installation. If you find any, you would want to have an insurance policy that offers that coverage without excessive limitations.
Know your limits of insurance. This is different for everyone but a good place to start is to look around you and mentally add up everything you are worth. Then, take that as the starting figure and don't insure yourself for anything less. It wouldn't make sense to be worth a million dollars and be insured for only fifty thousand. I hear all the time that my clients only want their contractors liability insurance to be $10,000 since their project cost is only $10,000 but they fail to understand that the project cost doesn't dictate the cost of a claim and a $100 job could cause $500,000 in damages.
Don't be shy about telling your insurance agent everything. Remember, we as insurance agents work for you. We are here to make sure that you get insured for what you are doing. If you don't communicate to us what you need, then we won't know to provide it for you.
Make sure your broker is working with your best interest in mind. Insurance agents are like anyone else and can get lazy. Make sure you get the most competitive insurance quotes possible. Ask to get comparison quotes so that you know they are really shopping around for you and not just handing you the first quote they get back. Ask your agent what kind of experience in contractors insurance they have. Unless they specialize in contractors insurance, it might be a good idea to look for someone who does so that you know that your particular needs are understood. Ask if the quote comes with any added features such as free additional insured certificates, free waivers of subrogation etc. I have heard clients tell stories about their prior insurance agents charging them for regular certificates of insurance and because it was not placed on the proposal the insured signed, they could do nothing about it. Lastly, ask for different payment options. Along with the old pay in full option, most carriers allow for payments to be made throughout the year which lessens the financial burden for contractors insurance policies.
Being a knowledgeable contractor looking for insurance will ultimately save you money and possible coverage headaches in the future. Just by taking a little time to do some research on your local construction requirements can head off many costly problems down the road and helps build the confidence to ask your insurance agent for exactly what you need. Understanding contractors insurance is like learning a new language and may seem a bit intimidating but don't fret, your insurance agent or broker is there to help you along the way. Don't be afraid to call and ask whatever questions you may have, after all, that's part of what you're paying for.
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