How to Build A California Contractor’s Insurance Program

Contractors’ insurance coverage has become perhaps even more important to a contractor than to other businesses.  Clients expect more in the way of construction expertise than ever before and in California, you are responsible for the integrity of your work for up to (and sometimes more than) 10 years.

The use of new materials and building techniques have created risks and liabilities that didn’t exist in the past and contractors must be assured that their insurance professional can provide a level of specialized knowledge that has kept pace with the ever increasing risk exposures.

Contractors have uniquely different liability exposures when they manage a building project, subcontract work, perform or subcontract a design, modify plans, change a manufacturer’s specification or provide construction management services to a project owner. Course of construction, accidents, timelines, change orders and contract administration are all concerns.

Contractor’s Insurance Should Include:

  • The basic contractor insurance program should include property/equipment, commercial liability, auto, workers’ compensation and perhaps excess liability.
  • In particular, the general liability policy must provide coverage for all of the project types upon which you perform work and must also provide coverage for all of the work that you performed in the past.
  • A contractor’s license bond is a license and permit bond which is designed to assist all types of contractors. In many states, contractor bonds are required and help ensure that the contractor will operate in compliance with the local statutes as well as laws.
  • If you have employees, the State of California (EDD and CSLB) requires you to maintain  workers’ compensation insurance.  If you are in business for yourself and do not have employees, you may be considered “exempt” from the required to maintain worker’s compensation insurance.  (It can be a very expensive mistake if you misjudge).
  • If you perform certain types of work, you will need environmental liability and/or professional coverage.
  • The contract that you sign will generally determine how much of an insurable exposure you are assuming and how of an exposure you are assuming that can’t be insured. Understanding the contract terms and their impact can make all the difference between moving on to the next successful project – or closing the doors permanently.

Risk Concept specializes in contractor’s insurance of every license type.   Risk Concepts, has the experience, technical knowledge and markets to place you in position to be a competitive and successful bidder.