Many businesses around the country are insured against different types of risks. However, some businesses carry insufficient coverage. Some policies also leave a coverage gap that can prove to be costly when liability arises. By working with a reliable insurance brokerage company, business owners, such as subcontractors, can do a risk assessment, determine their coverage needs and identify a policy that can provide them with sufficient protection. Smart Business Insurance highlights the reasons why clients may require you to carry insurance:
To Protect Themselves from Liabilities
Service providers, such as building contractors, electricians, HVAC companies, plumbers, glaziers, and transport subcontractors offer important services. However, many risks can arise when serving clients. First, you or your employees can get injured at the work site. Secondly, your team can cause injury to third parties. Other risks that may arise include property loss and damage. Since clients do not want to be exposed to unnecessary liabilities, they usually look for subcontractors with valid liability insurance coverage. In case a liability arises, your insurance company will pay for the injuries and damages, thereby protecting both you and the client.
Insured Subcontractors are Considered More Competent
Firms that operate without a valid insurance policy are either incompetent in that they do not know that insurance is an important requirement, or they consider insurance unnecessary. Any competent subcontractor knows the importance of having insurance. An insurance policy does not just protect clients from liabilities, it also protects the subcontractor from costly damages. Therefore, any business owner who thinks it’s not necessary to have insurance is incompetent and should not be hired as a subcontractor. That is why clients usually do their research before they choose a subcontractor. Any subcontractor without a valid liability insurance cover should be avoided.
It’s a Legal Requirement
In many industries, such as construction, insurance is a legal requirement. Any business that operates in these industries without a valid insurance policy is operating illegally. Clients want to hire firms that operate legally, so if you do not have proof of insurance, you will not make it to their shortlist. The vast majority of clients want to operate within the law by working with subcontractors that are compliant with the law, so this is an important reason why you should purchase business insurance.
Types of Business Insurance Policies
1. Business Property Insurance
This is also known as commercial property insurance. It protects the business premise, fittings, furniture, stationery, inventory, equipment, and any other tangible asset that may be owned by the subcontractor. In case of damage or loss due to theft, inferno, earthquake, or any other incident, the insurer will compensate the subcontractor fully.
2. Public Liability Insurance
Subcontractors should carry liability insurance, whether it’s public liability insurance or general liability insurance. This is because customers, shareholders, suppliers, and members of the public can file a lawsuit that may cripple the business. With a public liability insurance policy in hand, the insurance company will pay legal fees and other costs that come with an injury lawsuit.
3. Workers’ Compensation Insurance
Employees need to be taken care of at all times. If an employee gets injured at the work site, they should be accorded the best medical attention as well as get wage replacement benefits if their recovery period takes more than a week. Workers’ compensation insurance also protects subcontractors from lawsuits as beneficiaries are prohibited from filing any lawsuit against their employer.
4. Commercial Vehicle Insurance
Commercial vehicles usually carry a lot of valuable building materials and equipment. These vehicles are also valuable. Commercial vehicle insurance protects you from losses arising from auto accidents involving commercial vehicles. Carjackings, vandalism, and theft are also covered by most commercial vehicle insurance policies.