What Happens If a Contractor Works Without Insurance?

A contractors must consider many risks and perils amid daily operations. Regardless of your role in projects or the exact services offered, the construction sector remains among the most dangerous U.S. industries. As such, even the most experienced and diligent professionals should prioritize insurance. Without the ample risk management and loss control offered by appropriate policies, your contracting business could face extensive repercussions.

Situations Where Being Underinsured Can Be Costly

Uninsured and underinsured contractors could be putting their financial interests, businesses and entire careers at risk. Consider the following situations in which a lack of insurance might leave you facing expensive consequences:

• Workplace accidents—Given the constant presence of dangerous equipment and tasks at construction sites, work-related injuries and illnesses may be inevitable. If you’re injured or develop a work-related illness due to an accident, workers’ compensation insurance may be necessary to help manage medical bills and income replacement during your recovery.

• Third-party injuries—Contractors may be found liable for other parties’ bodily harm. For example, if a guest on a job site or a pedestrian walking past are injured by a falling object or exposed to a hazardous material, you could face costly consequences. General liability insurance could help offset resulting losses, potentially paying for affected parties’ medical bills and your legal expenses.

• Legal noncompliance—Businesses are often subject to laws requiring certain types of insurance. For instance, contractors using motor vehicles as part of their operations are required to carry commercial auto insurance. Failing to adhere to these obligations could lead to costly fines, as well as having your license revoked and even being ordered to shut down your business altogether.

• Limited prospects—Many clients and customers may impose their own requirements regarding insurance. Without satisfying these mandates, your company could be passed over for jobs, potentially costing you significant growth and networking opportunities.

What Types of Insurance Do Contractors Need?

Contractors’ coverage needs may vary significantly depending on unique circumstances, but your business may often find value in the following:

• General liability insurance

• Professional liability insurance

• Workers’ compensation insurance

• Business interruption insurance

• Builders risk insurance

• Commercial auto insurance

• Inland marine insurance

• Commercial umbrella insurance

Get the Right Coverage in Cranston, RI

Contact Cormack-Routhier Agency, Inc. today to learn more about contractors insurance and compare personalized quotes.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.