Purchasing contractors insurance is simply one of the many responsibilities that contractors face in the course of their business. While it is important to find the best coverage for your operations, it is also important to save as much money as you can.
Understanding what affects the cost of your insurance can help you save money on your contractors insurance policy.
Size of the Business
Large contracting businesses generally require higher amounts of insurance, which in turn costs more in premiums. This doesn’t only to apply to the number of contractors or subcontractors a business may employ, however. If you have a larger client base, you face more risk of lawsuits and other claims.
Types of Coverage
Contractors insurance is an umbrella term for several different types of coverages that can be used by contractors. Some of the coverages you may consider as a contractor include:
General Liability covers non-professional negligence claims concerning bodily injury, property damage and personal and advertising injury. This covers injuries and damages a third party may face as well as legal expenses the contractor may face.
Professional Liability covers professional negligent accidents that may cause a client to lose money.
Commercial Property covers property owned by the contractor such as a physical office and equipment in case of damage caused by fire, wind, hail, lightning, smoke, theft, vandalism and more.
Commercial Auto Insurance covers vehicles owned or used by a business for work purposes, such as vans or trucks used to transport material and equipment or travel between client locations.
A business or contractor with a history of claims is a sign to an insurer that you are more at risk to file a claim in the future. If you have filed a number of claims in the past, you may face higher premiums. While not all accidents are avoidable, it is important to operate as carefully as possible in order to avoid unnecessary claims.
Credit of the Insured
The credit score of the policyholder (in most cases, the contractor or business owner) can also affect the cost of contractors insurance. Credit scores are considered as an example of how reliable a policyholder will be in paying their insurance premiums in full and on time. If you have a low credit score, you may pay more for contractors insurance. On the other hand, a high credit score can save you money on coverage.