Insurance Needs for Artisan Contractors

Artisan contractors—also known as casual contractors—are often hired to handle specialized projects that require a specific skill set. These contractors include carpenters, plumbers, electricians, roofers and tree surgeons. Due to the wide variety of tasks these contractors perform, they may need specialized coverage to protect against liability.

This article discusses the potential exposures artisan contractors face and common types of construction insurance.

Potential Exposures

It can be challenging to control risk in the construction industry. The following are some of the most common risks artisan contractors are exposed to:

• Injury—Artisan contractors are susceptible to slips on slick surfaces, falls from heights and strains from manual material handling. Third parties may also be injured at project sites.
• Property damage—Damage to a client’s property can occur both during a project and after its completion. For example, a fallen ladder may cause damage to items inside or around the property.
• Auto accidents—Any business that utilizes vehicles is susceptible to auto accident risks. Accidents could lead to injury or death, and the vehicles involved could also be rendered useless.

Common Types of Construction Insurance

Artisan contractors should have adequate insurance to manage their risks. They should consider the following coverages:

• Workers’ compensation—Workers’ compensation covers work-related employee injuries or illnesses. While injuries are infrequent, they can be severe and require extensive medical treatment, resulting in a loss of ability to work. Workers’ compensation is critical coverage, as it takes care of the injured employee in the event of an accident. It will pay medical bills associated with work-related injuries and compensate the employee for lost wages—which can occur if the injury is severe enough for a doctor to recommend taking time off. What’s more, workers’ compensation policies typically come with employer’s liability coverage, which covers employers if a lawsuit is brought against them for their negligence in a workplace injury.
• General liability—General liability insurance covers claims of injury or property damage caused by routine operations. Artisan contractors face exposure if they work in occupied buildings or customers come into their office or showroom. General liability insurance can also cover damage to a customer’s building caused by a contractor. Additionally, it can provide coverage for reputational harm or advertising injury.
• Completed operations—Completed operations claims occur when injury or property damage results from finished work. This coverage protects businesses that provide a service and does not apply until after the work is done.
• Commercial auto—Artisan contractors may use trucks or vans to transport employees, materials and equipment to a worksite. Commercial auto insurance can cover damage to company vehicles, damage to others’ vehicles and medical payments. Physical damage covers the damage to company vehicles, and liability covers damage done to other vehicles. Hired and non-owned coverage takes care of rental vehicles and employee-owned vehicles used for business reasons.
• Property—Damage to a company’s physical assets, including buildings and the business property, may result in property claims. Even if artisan contractors work out of their homes or do not have their own building, business assets such as equipment, tools and computers are still at risk of property damage. Property insurance protects only from the perils outlined in the policy. For example, floods are generally not covered events. Additional coverage may be necessary.
• Inland marine or equipment floater—Since commercial property insurance only covers business property at the location listed on the policy, inland marine insurance may be necessary for property stolen or damaged during transit. Since contractors typically travel to job sites with tools and equipment, equipment floater policies can help protect them from risk.
• Commercial umbrella—Commercial umbrella insurance provides additional coverage if claims exceed their limits. For example, if the policy limit is $1 million, but the loss is $2 million, an umbrella policy can make up the difference. Otherwise, costs may have to be paid out of pocket.
• Cyber liability—Increasingly, contractors depend on technology to carry out their operations. Complex projects often require information and financial exchanges between clients, contractors, suppliers and other third parties. While technology helps contractors perform their work, they are at risk of suffering financial losses from cyber events. Cyber liability insurance can help artisan contractors by providing coverage for first- and third-party cyber claims.

To best mitigate risk, artisan contractors should explore all policy options to find coverage for their business. For more information, contact us today.

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