What types of Insurance should a Contractor Carry
Just like any other business, an independent contractor can be held liable for property damage, customer injury and advertising injury. Independent contractors are highly advised to purchase general liability insurance to protect themselves and their businesses. This type of insurance can provide many benefits.
General Liability Insurance
General liability insurance covers personal property damage and Worker’s Compensation insurance if they bring subcontractors to jobs. According to the Florida licensing board, general and building contractors are required to have a minimum coverage policy that includes $300,000 for public liability and $50,000 for property damage. All other contractors are required to have a policy that covers $100,000 for public liability and $25,000 for property damage.
General contractors are required to carry Workers Compensation insurance to cover the medical expenses, lost wages, and employer liability if one of their workers suffers an injury, illness or death while working.
Protecting The Business
If a contractor damages a client’s property while working or causes bodily harm, their general liability insurance will cover the legal fees and damages that may result from the lawsuit.
It Is Legally Required
General liability insurance is required in Florida. There are different types of coverage and types of contractor licenses based on the area of specialization. The area of general contracting that your business falls under will determine what Florida certification board requirements you must meet.
Commercial Auto Insurance
If you own vehicles used for business purposes, you need to have commercial auto insurance. It protects your occupants and anyone else who can be injured in the event of an accident. Commercial auto insurance can include collision and comprehensive coverage, uninsured or underinsured motorist coverage, rental reimbursement, towing and labor, injuries and property damage.
Suppose a contractor gets into an accident while using one of their commercial vehicles. In that case, their commercial car insurance policy can provide coverage for expenses related to emergency room care, property damage, lost wages, legal fees, and gap coverage on financed or leased vehicles up to the policy limit. If employees operate cars or trucks for the business, then the commercial auto insurance policy must cover them.
Do I need to ask my contractor to show proof of insurance?
There are two different types of licenses: certified licenses and registered licenses. Certified licenses allow a contractor to work anywhere throughout the state of Florida and include air conditioning, plumbing, residential, solar, roofing, underground utility, and excavation work. Registered licenses are required for working in local jurisdictions in cities and counties. There is significant overlap in the licensing requirements per industry, such as air conditioning, building, plumbing, residential, etc.
In order to receive one of these licenses, individuals must provide proof of financial stability by submitting a credit report not only for their business entities but for themselves, which must include a FICO-derived credit score. This ensures that the company is legitimate and financially responsible. The applicant must also undergo a thorough background check, including fingerprinting. A reputable remodeling company would be happy to provide any licenses that they hold, and will go above and beyond to show their clients how trustworthy they are not only in craftsmanship but in safety and security.
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