Insurance Needs for Artisan Contractors

It’s important to make sure your groundwater business has the right types of coverage.

Artisan contractors, also known as casual contractors, are often hired to handle specialized projects that require a specific skill set. These contractors include carpenters, plumbers, electricians, roofers, tree surgeons, and most importantly—water well drillers and pump installers.

Due to the wide variety of tasks these contractors perform, they may need specialized coverage to protect against liability. This column discusses the potential exposures artisan contractors face and common types of construction insurance.

Potential Exposures

It can be challenging to control risk in the construction industry. The following are some of the most common risks artisan contractors are exposed to:

  • Injury Artisan contractors are susceptible to slipping on slick surfaces, falling from heights, and strains from manually handling materials. Third parties may also be injured at project sites.
  • Property damage: Damage to a client’s property can occur both during a project and after it is completed. For example, a fallen ladder may cause damage to items inside or around the property.
  • Auto accidents: Any business that has to use vehicles is susceptible to risks of accidents. Auto accidents can lead to injury or death, and the vehicles involved can also be rendered useless.

Common Types of Construction Insurance

Artisan contractors should have adequate insurance to manage their risks. Here are the types of coverages they should be aware of and consider:

  • Workers’ compensation: This type of insurance covers work-related employee injuries or illnesses. While injuries are not that frequent, they can be severe and require extensive medical treatment, resulting in a loss of ability to work.

Workers’ compensation is critical coverage, as it takes care of the injured employee in the event of an accident. It will pay medical bills associated with work-related injuries. It will compensate the employee for lost wages—which can occur if the injury is severe enough for a doctor to recommend taking time off.

What’s more, workers’ compensation policies typically come with employer’s liability coverage, which covers employers if a lawsuit is brought against them for their negligence in a workplace injury.

  • General liability: This type of insurance covers claims of injury or property damage caused by routine operations. Artisan contractors face exposure if they work in occupied buildings or customers come into their office. General liability insurance can also cover damage to a customer’s building caused by a contractor. Additionally, it can provide coverage for harm to a company’s reputation or injury related to advertising.
  • Completed operations: These kind of claims occur when injury or property damage results from finished work. This coverage protects businesses that provide a service and does not apply until after the work is done.
  • Commercial auto: Artisan contractors may depend on a variety of trucks and vehicles to transport employees, materials, and equipment to a worksite. Commercial auto insurance can cover damage to company vehicles, damage to others’ vehicles, and medical payments.Physical damage covers the damage to the company’s vehicles, and liability covers damage done to other vehicles. Hired and non-owned coverage takes care of rental vehicles and employee-owned vehicles used for business reasons.
  • Property: Damage to a company’s physical assets, including buildings and the business property, may result in property claims. Even if artisan contractors work out of their homes or don’t have their own building, business equipment, tools, and computers are still at risk of property damage.Property insurance protects only from the perils outlined in the policy. For example, floods are generally not covered events. Additional coverage may be necessary.
  • Inland marine or equipment floater: Since commercial property insurance only covers business property at the location listed on the policy, inland marine insurance may be necessary for property stolen or damaged during transit. Since contractors typically travel to jobsites with tools and equipment, equipment floater policies can help protect them from risk.
  • Commercial umbrella: Sometimes an insurance is needed that provides additional coverage if claims exceed their limits. For example, if the policy limit is $1 million, but the loss amounts to $2 million, a commercial umbrella policy can make up the difference. Otherwise, costs may have to be paid out of pocket.
  • Cyber liability: More and more, contractors depend on technology to carry out their operations. Complex projects often require information and financial exchanges between clients, contractors, suppliers, and other third parties. While technology helps contractors perform their work, they are at risk of suffering financial losses from cyber events. Cyber liability insurance can help artisan contractors by providing coverage for first- and third-party cyber claims.

To best control and lessen risk, artisan contractors working in the groundwater industry should explore all policy options to find the right coverage for their business.

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This column is not intended to be exhaustive, nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. Go to the NGWA webpage at www.ngwa.org/members/member-benefits/Business-insurance to find out more information about companies it has partnered with.

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