A simple guide for protecting your business
Operating a business without insurance is simply not an option. What happens if there is an accident on a jobsite? If you’re operating as an independent contractor and you don’t have the proper insurance, you could lose everything you own. Buying insurance doesn’t even have to break the bank and it doesn’t take a long time to do. In fact, buying insurance is so simple that it can be done during your coffee break, start to finish! Here is a simple guide to buying insurance.
What insurance do you need?
Before you buy business insurance, take a few minutes to figure out what type of insurance you need. This will save you time when you’re filling out an application form and might prevent an over-eager insurance agent from selling you a product you don’t need. Here are some options:
- General liability insurance is a must for everyone who works for a third party. You usually won’t be able to get a business license without it. General liability insurance is what covers you in case you accidentally damage a client’s property, like breaking a window or leaving scratches on the paintwork. It can also protect you from having to pay hefty medical fees if someone gets injured by a falling ladder or trips on your extension cord and takes a nasty fall.
- Professional liability insurance is important for businesses like landscapers, general contractors, roofers, and carpenters. It covers you in cases where a client accuses you of not doing your job properly, making professional mistakes, or claims that you were negligent.
- Product insurance is for anyone who sells building materials or tools. It protects you in case the items you sell cause damage or don’t work properly.
- Equipment insurance covers your expensive tools and equipment and is a good idea. If they are stolen or damaged, it could cover replacement costs.
- Worker’s compensation is non-negotiable if you have employees. This policy will cover you in case they get injured while at work. Also, many contractors require their sub-contractors to have a work-comp policy even if they work alone.
- Commercial auto insurance coverage is critical if you use your vehicle for work, other than driving to and from a job site. If you get into an accident while running a work-related errand, your private insurance may not cover you.
Who should you buy your insurance from?
You could stop in and visit your local insurance agent, or you could save time and contact an online broker like Next Insurance. Either way, check that any insurance provider you’re considering is trustworthy. You want a company with solid reviews from business owners like yourself. Look for online reviews; make sure they’re certified by the Better Business Bureau and ask other professionals you know about their experiences.
Try to get quotes from at least two different companies so you can make a knowledgeable comparison (three is even better). When you’ve gathered the information you need for one application, you’ll find that the other applications will be similar and won’t take long to complete. Three online applications shouldn’t take long. A Next Insurance policy can be purchased in just 10 minutes.
Check your insurance policy
No matter how short you are on time, you should never sign something that you didn’t read. Insurance policies can be dense and full of jargon. These are the important questions you need to ask:
- How much will it cost? For a comparison, most Next Insurance general contractors usually pay between $62-$83 per month for their general liability policies.
- Do I have to pay for a whole year up-front, or can I pay monthly?
- What types of coverage is included? Look for the types listed above.
- How much is the deductible?
- Are there extra fees I should be aware of? (Many online insurance companies have done away with extra fees, but you should check. In particular, if you’ll want certificates of insurance, make sure that they are included with your policy.)
How do insurance premiums work?
Once you’ve gotten a few quotes and decided which is the right one for your business, it’s time to make your first premium payment. If you’re required to pay annually, you’ll need to pay for a full year’s worth of coverage up front. If you’re paying monthly, you’ll likely be asked to pay for your first and last month’s coverage.
Your payment secures the insurance contract. With most insurers, you’ll be covered from the moment you sign the policy. Others begin your insurance from the time that you make the first payment, or enable you to choose when your coverage will start.
Your insurance company should send you a certificate of insurance, which is the proof you need to show to clients that you are insured. Some companies charge a fee for every copy you need, but companies like Next Insurance allow you to download and share your certificate as often as you like without any extra fee. Share your certificate of insurance as an attachment in an email, or print it out and hand it to your client.
Get back to work
If you’ve bought your insurance online from a company like Next Insurance, your coffee will still be hot by the time you’re done. Once you’re covered, get back to work, knowing that your business has exactly the right insurance coverage, at the right price.
Disclosure: This post is brought to you by The Construction Pro Tips editors, who aim to highlight products and services you might find interesting. If you buy them, we get a small share of the revenue from the sale from our commerce partners. We frequently receive products free of charge from manufacturers to test. This does not drive our decision as to whether or not a product is featured or recommended. We welcome your feedback.