California Contractor Insurance Guide 2021

Being an independent contractor is a highly responsible job. Dealing with projects that involve multiple workers on different construction sites already sounds chaotic before the work even starts. And while each employee has a clearly defined set of obligations they stick to, you have to keep a watchful eye on everyone to ensure there are no slip-ups.

A very significant part of a contractor’s job is insurance. It’s a way to make sure that you’ll be prepared for any unwelcome circumstance along the way, be it property damage, physical injuries, theft, or something else. Once it happens, it matters less who did it but whether you’re able to roll with the punches and keep the operations going strong. And that’s precisely why you need insurance.

More than a Necessity

Whenever you take up any project, small or large-scale, the first thing you need to do is protect your business. In the construction field, everything can go wrong if you’re not well prepared. There’s plenty of physical labor involved, a heap of machinery, materials to buy, store, use, waste disposal, etc. Contractor’s insurance gives you the peace of mind to carry on with work, knowing that you can’t get caught off guard.

The means of protection we’re talking about is a rather complex set of policies covering all critical points. In practice, this means you get insurance for workers’ compensation, builder’s risk, general liability, and so on. Now, securing your operations isn’t something you only do for yourself and your business. Most often, you’re legally bound to obtain a contractor’s insurance, and more and more clients realize its importance, so they ask for it specifically.

Liability Insurance

This part deals with protecting the contractors in case of construction errors. As we said, building services involve many stages, and mistakes can easily happen. For instance, the architect could miscalculate a wall position, and the work has already started; naturally, it has to be demolished and built all over again. If you’re insured, you’ll automatically be shielded from such unforeseen expenses.

The example above illustrates a third-party error, i.e., someone you hired to work on your project. This includes other third parties, too, such as engineers, workers, designers, cleaning services, etc. But what about your own mistakes as a contractor? Don’t worry: general liability covers that too.

And what if someone outside the project visits the site? Let’s say the customer decided to check how things are going and inspect the construction more closely. If there’s an operation going on, they could get hurt and then blame you for it. This is the last thing you want if you want to preserve your status as a reputable professional.

Thankfully, being insured ensures your safety in the event of a visitor’s physical injury, property damage, or even slander if they persist with the accusations. It might lead to court, and suing is never fun. Instead of burdening yourself with legal and medical expenses, you can get insurance and stop worrying about settlements, attorney fees, hospital bills, or even funeral expenses in the most extreme scenario.

Builder’s Risk

To get more information regarding contractor’s insurance, it’s best to devote some time to research before starting your project. Organizations such as have developed all-encompassing solutions to help you sleep soundly at night and focus only on the work.

Getting back to the risks: even the safest construction site is not immune to perils. From the very beginning, you expose materials, equipment, and fixtures to natural risks such as wind and fire, as well as man-made hazards such as theft and destruction. More extreme disasters such as floods or hurricanes are usually excluded from basic policies.

Imagine arriving at work one day, only to see the walls spray-painted by some delinquents during the night. Or finding the windows broken or the equipment damaged. You’ll agree it’s far from a pretty sight, and it can set your project back. The reimbursement that comes with a builder’s risk insurance will cover the damage and allow you to go on at full tilt.

The same goes for stolen materials. Without adequate protection, your project can become an easy target for thieves. Instead of wasting days and weeks with the local police and buying new equipment, the insurance will replace your stolen goods.