Running a contracting business is an impressive feat. You have to get your hands dirty, consult with customers, and manage your employees. While juggling these responsibilities, you might miss some contracting risks that could really screw up your business and impact your bottom line.
Noticing these contracting risks before they happen is a strong first step towards protecting your business. Don’t worry; we’re here to help! Here are just a few common contracting risks that you need to be aware of, and how insurance can help you combat them.
These three contracting risks could really screw up your business
Contracting Risk #1: Liability risk
You’re a contractor, which means you’re used to working in messy environments. Whether you’re doing electrical work, tiling floors, or breaking down walls like the Kool-Aid man, you and your contracting business may be exposed to a number of liability risks. Some of these liability risks include:
- Injuring a customer or third party who visits your worksite
- Damaging your customer’s property
- Damaging a third party’s property
If you make an honest mistake, no matter how small, it could still have a big impact on your business. Whether you’re your own boss or working as a subcontractor, you could be held responsible if something goes wrong, which may lead to a costly lawsuit. You should consider getting commercial general liability insurance to protect your business from these risks.
Commercial General Liability (CGL) insurance can help protect you and your business from financial consequences caused by liability risks. If you work with independent contractors, it’s important to remember that your CGL coverage may not cover their work. As a small business owner, you should always ask the independent contractors you work with to provide proof of CGL insurance to ensure they’re also properly protected.
Contracting Risk #2: Property risk
Like Batman’s utility belt, your tools help you get the job done. But what happens if a flood or a fire occurs? Your tools could get unexpectedly damaged from these types of risks. Having the right insurance coverage can help keep your repair and replacement costs down. You should consider getting commercial property insurance and business interruption insurance coverage to protect your tools from these types of risks.
Commercial property insurance will help protect your workshop, contents, and supplies if they get damaged by an insured peril. This would cover Batman’s equipment if the Bat-Cave had a fire, and it will protect your tools and supplies as well. It will also protect other business contents you maybe have at your workshop or a jobsite, including electronics, furniture, and building materials. You’ll have peace of mind knowing your contents are covered from sudden disasters.
Business interruption insurance can offer protection against loss of income due to an insured claim, and help cover expenses if your business is unable to run normally due to an insured loss. If the Bat-Cave catches fire, this coverage would relieve some of Batman’s lost income while he repairs his cave and replaces his equipment. This coverage will also help you relieve some of your lost income while you repair or replace your own workshop and equipment. If you need to temporarily relocate, business interruption insurance can help with those costs as well.
Contracting Risk #3: Theft
Construction site theft is an ongoing issue in Canada. News stories, arrests, and warnings on this topic pop up regularly. Like taking candy from a baby, stealing equipment from construction sites may be easier than you think. Even if your tools are safely secured and meticulously marked, some things are out of your control.
Contractor tools are popular targets for theft because they’re often left unattended. These tools can be easily resold on the black market. Other frequent targets for thieves include appliances, supplies, and copper wiring. Commercial property insurance can help you replace stolen tools and supplies, cover some of the costs associated with theft, and may even reimburse you for the cost of renting tools in the meantime.
Protect your bottom line
Liability risks, property risks, and theft are all areas that can cause trouble in paradise for your business. Knowing how to identify and prevent these contracting risks can help you avoid loose screws and costly losses. So, remember to keep your eagle eyes open while you’re getting your hands dirty and running the show.
This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information. Terms, conditions and exclusions apply to coverage, see policy for details.