Frequently Asked Questions
What types of insurance do I need as a contractor?
As a contractor, you go to where your clients are, their homes & business. If you are working on their home and damage it or you injure someone while at the site, General Liability Insurance will be there for you to pay out to 3rd parties you injure. Your also may need Inland Marine Coverage to cover your tools & equipment that you take with you from jobsite to jobsite should they be stolen. You may also want to consider Completed Operations Liability to cover in case you install something that causes a loss long after you have completed the job. Example: You install a ceiling fan and 6 months later there is a house fire due to the way the ceiling fan was installed. If you hire employees, you will also want to consider Worker’s Compensation as that is a requirement in Colorado.
What is an Additional Insured?
Adding certain entities as Additional Insured’s is most often seen as a part of construction contracts. If you are hired as a subcontractor by another entity, it is not unusual for that entity to ask to be added to your General Liability policy as an Additional Insured. This protects them if they are sued by someone for the work that you do. This obligates your insurance to consider them as an insured and therefore pay the claim as the primary insurer and to also defend them in a lawsuit.
What is a Certificate of Insurance?
These are often requested of contractors when they are being hired by the general public or by other contractors like General Contractors and is proof of insurance coverage in effect. The form includes much of the same information you see on your Policy Declaration page but what makes it unique is that in the upper right hand corner, it will show the current date so that the Certificate Holder can be confident that the 12 month Policy is still in force as of that date.
What is the difference between an Independent Contractor & Employee?
In both cases, you as the business owner can be held liable for the acts of your employees and subcontractors. It is also very important that you study the Colorado Dept of Labor’s definition of an Independent Contractor as many businessowners have been fined for calling workers Independent Contractors when the state considers them Employees by definition. If they are your Employees, you are required to carry Workers Compensation and can be fined and penalized for not doing so. From a Liability perspective, your General Liability can cover your exposure regardless of their status. You will want to make sure your insurance company accounts for them and their status as either an Employee or Subcontractor. Talking to an agent can help you avoid getting into trouble.