How many owners of construction businesses here in the States ever thought that a pandemic like Coronavirus would hit the industry and put your livelihood at such risk? This global virus is a lesson to all of us: be prepared. Of course, no business owner can prepare for every risk. However, we must do what we can with the resources at our disposal. One of these resources is insurance.
Are you protecting your contractor business properly?
But there are 2 expensive mistakes that contractor business owners make. Take a look and see if you are guilty of either (and what to do if you are!)
You’ve got attitude
So many contractors view insurance as a grudge purchase. They wince every time they pay the premium. On the other hand, contractors who have looked at the odds know that it is only a matter of time before you are faced with a big expense that could be covered by insurance. Accidents happen all the time, especially in a high risk industry like construction. If you can prevent an accident and resulting claim from wiping you out financially, surely you should?
You’ve had enough
It is common for contractor businesses to be underinsured. Contractors are unlikely to realise their business is underinsured until it comes to facing claims and lawsuits, by which time it is too late. You could be so busy with the day-to-day demands of running your business that you may not have realised that the changes that have happened will impact your insurance coverage. This is why it is vital that you have your insurance company reassess your coverage annually.
The dangers of being underinsured
If your contractor business is underinsured it means that the limits of your coverage are not high enough to cover the full expenses of the claim. It is obvious that, if your coverage is insufficient, the claim will exceed the maximum amount that can be paid out by the insurance policy.
You might think that this is a risk worth taking, because your insurance will pay a portion and you’ll pay a portion. But this isn’t exactly how it works. The consequences of being underinsured extend further.
Did you know that your insurer could cancel your Contractor Liability insurance if you are uninsured and make a claim? So, if you are thinking that being underinsured is better than not being insured at all, you are wrong. Your insurer could void your policy. You’ll be refunded the premiums you have paid, but this is unlikely to cover the financial loss of the damages. It doesn’t stop there. Your insurance company could also recall money they have paid out for previous claims.
Fix Your Contractor Liability Coverage
In all of these cases, you’ll be facing serious financial loss because you will be unable to pay the claim, whether it is because your insurance company applies the average rule, or they void your policy, or you just don’t have Contractor Liability insurance at all.
Now is the time to step back and reassess your coverage. Has your business changed and how does this affect your insurance coverage? Are you paying too much for too little coverage? To find out what to do next, speak with the insurance consultants at Contractors Liability on (866) 225-1950.
We’re here to help.