The Essential Insurance Checklist for Connecticut Contractors: Are You Fully Covered?

As a construction contractor in Connecticut, every project you take on comes with its own set of risks — not to mention the risks that contractors face in general. Comprehensive insurance is imperative for preventing the unexpected from devastating your business.

This checklist can help you make sure you have all the bases covered.

General Liability Insurance for Contractors

As a foundational type of coverage, this is often the starting point for Connecticut contractors as it covers third-party property damage, personal injury, and bodily injury claims. This must-have coverage protects against claims and lawsuits related to negligence and accidents at work sites.

It should include the following coverage:

• Bodily injury liability
• Property damage liability
• Personal injury
• Advertising injury

Commercial Auto Insurance for Contractors

You likely use vehicles for business-related purposes. Whether you transport materials or bring equipment to and from construction sites, commercial auto insurance is required, as personal vehicle policies do not normally cover vehicles when they are being used for business.

It should include the following coverage:

• Collision coverage for damage to your vehicles
• Liability coverage for property damage and bodily injury
• Comprehensive coverage for non-collision incidents such as vandalism or theft

Business Interruption Insurance for Contractors

Business interruption insurance can provide coverage for periods when contractors’ operations are interrupted due to a covered peril, such as a natural disaster or fire. It can also cover lost income and expenses during this time. These policies typically specify a coverage period that will take effect after a set waiting period.

Umbrella Liability Insurance for Contractors

Although your general and auto liability policies should provide a reasonable amount of coverage for basic incidents, contractors are not uncommon to be subjected to claims exceeding these policies’ limits.

Umbrella insurance offers an additional layer of protection that goes above the limits of primary insurance types to protect against catastrophic liability claims. It may be paid out per occurrence or with an aggregate limit.

Umbrella insurance can offer additional coverage when the limits of the following insurance policies are exceeded:

• General liability
• Commercial auto liability

Employment Practices Liability Insurance for Contractors

If your contracting business has employees, employment practices liability insurance is one type of coverage that can prove useful. It offers protection against claims filed by employees who allege that a contractor has engaged in wrongful employment practices such as harassment, wrongful termination, or discrimination.

It should include the following coverage:

• Defense costs
• The costs of settlements
• The costs of judgments

Property Insurance for Contractors

Property insurance protects a contractor’s business property against many risks. This can include the equipment, tools, supplies, and buildings used for your contracting work.

Contractors can choose between property insurance that pays out the replacement cost of affected tools and equipment or actual cash value coverage. Insurance agents can advise on the right approach to suit your risk exposure and budget.

Your policy should include the following coverage:

• Fire
• Natural disasters
• Theft
• Vandalism
• Tools and equipment stored off-site

Cyber Liability Insurance for Contractors

Although Connecticut contractors may not consider their work, particularly tech-heavy, it is worth remembering that contractors who use computers and mobile devices for any business-related purpose are vulnerable to data breaches, cyber-attacks, and other incidents that could compromise sensitive client information. Cyber liability insurance can cover the costs associated with breaches.

It should include the following coverage:

• Legal fees related to data breaches
• Liability stemming from data breaches
• Expenses involved in notifying affected customers of breaches
• Required credit monitoring services for affected clients

Errors and Omissions (E&O) Insurance for Contractors

Often referred to as professional liability insurance, many construction contractors may overlook this type of insurance because they do not offer conventional professional services such as legal or financial advice.

However, many types of contractors are expected to provide a certain standard of care and could be held liable for their work. This is particularly true of design-build contractors who offer in-house design capabilities to cover design-related claims.

Even general contractors can benefit from E&O insurance as they generally still offer some degree of professional service. A general contractor is often one of the first parties listed in a lawsuit when something unexpected happens in a construction project.

An E&O policy for contractors should include the following coverage:

• Claims for faulty workmanship
• Claims stemming from design errors
• Legal defense fees
• Costs of settlements
• Costs of judgments

Workers’ Compensation Insurance for Contractors

Most employers in Connecticut are required to obtain workers’ compensation insurance, which also applies to contractors who have employees. It must be purchased from a state-approved insurer, and contractors must comply with the state’s workers’ compensation reporting and posting requirements.

Construction is dangerous work, and this coverage for injuries and illnesses that occur while workers are on the job offers valuable protection for employees and contractors, as it can cover lawsuits related to these injuries.

It should include the following coverage:

• Medical expenses
• Rehabilitation costs
• Lost wages

Discuss Your Connecticut Contractor Insurance Needs with JMG Insurance Agency

Does your coverage fall short in any of these areas? Are you wondering which types of insurance can cover specific risks of concern? The experienced insurance agents at JMG Insurance Agency can devise a customized insurance package that meets your needs and budget. Contact us today to learn more about our services.