Getting contractor business insurance for your new construction business is a great way of protecting it from failure. The construction business can be lucrative, but it is also notoriously difficult to keep a new business going. So, if you have an entrepreneurial urge and some construction experience, setting up your own construction company can be very beneficial.
However, becoming self-employed has its challenges. Preparation is key. Before starting, you need to have a plan in place. Consider things like financing, insurance, and legal requirements.
In this article, we take a look at what to do when starting your contractor’s business.
4 Steps to becoming your own boss
1. Plan your business
Having a concrete business plan is the first step towards a successful construction business. You don’t necessarily need a formal document. There are numerous online templates you could use. Planning helps you visualize your entire business. It also allows you to:
- Set your priorities
- Manage your finances
- Develop milestones
- Create action plans in case of a crisis
- Establish viable metrics
- Select a contractor business insurance provider
To create a sustainable and competitive business in the construction industry, you need to put in a lot of effort and planning.
2. Secure financing
As a new business, it may take you a couple of months to complete your first project and get paid. Meanwhile, you will have several financial obligations. You will need to pay for: a new business premise, purchase machinery and equipment, purchase or lease a vehicle, pay employees, get licenses, and purchase contractor business insurance.
Create a comprehensive outline of your financial requirements as part of your business plan.
Consider getting financing from friends, family, financial institutions, and equity investors.
You should note that new businesses are often required to provide collateral to financial institutions before they can secure loans.
3. Obtain relevant permits and licenses
Every contractor business needs to get the right business permits and licenses. Otherwise, you risk paying hefty fines and being closed down. It is important to note that different states have their own licensing requirements and procedures of obtaining them.
Invest in contractor business insurance
Starting a new construction business without Contractor Liability Insurance is asking for trouble. Your new business could go under as soon as the first claim is made. Remember that without insurance you will be liable for damages. This added (or unforeseen) expense may be too much for your new business.
Contractors Liability will cover third-party bodily injury, third-party property damage, personal injury, and advertising damages. Your insurer covers your legal requirements in case you are sued for libel or use of copyright material for advertising.
The importance of contractor business insurance cannot be understated. It gives you peace of mind and allows you to take care of getting new projects, hiring staff, buying equipment, and the other things that grow a new business. Find out more from Contractors Liability on 866-225-1950