In my Case study series, I will offer you a look at highlights of an insurance package for fictional companies in various industries. So let’s pretend that I am a contractor C’s Renovations Inc.

Like everything in life, we have to start from the ground up. When C’s Renovations Inc. started business, I would have invested in some equipment and some of it is probably rented. All the property should be insured for at least 90% of value (due to the co-insurance clause) and any property valued over a certain amount will have an agreed upon amount in case of loss (or Scheduled)

Highlights of Property Coverage for a contractor include:

• Rental Reimbursement (pays for the rental of equipment lost to an insured peril)
• Rented Equipment Coverage Endorsement (this covers you for loss or damage to rented equipment)
• Installation Floater – Insures direct physical loss to materials and supplies you own or are responsible for that are destined to become part of a structure (incl. machinery)

The next item to look at is the Third Party Liability a.k.a Commercial General Liability. This will protect you from various claims including Bodily Injury and Property Damage caused by you or your employees.

Highlights specific to Contractors should include:

• Bodily Injury and Property Damage
• Completed Operations – Covers that part of the my workthat is defective (if any)
• Rip and Tear Endorsement – coverage for the costs relating to the intentional destruction of a wall, partition, floor or ceiling while taking out a “defective product”

Once the property and liability aspects are taken care of, the health and welfare of the owner should be strongly considered.

Most contractors are sole proprietors – as such their income is largely based on their ability to earn money. What happens when they get injured or sick? Here are 2 types of policies to consider when rounding our your insurance package:

1. Disability insurance – supplementing your wages while you are hurt
2. Critical Illness Insurance – pays you a lump sum if survive a critical illness diagnosis

To Illustrate, I will use myself as an example (as a 31 year old male contractor):

Disability coverage:

About $100 per month gets me: $2300 monthly benefit, 30 day waiting period, benefits until age 65

Critical Illness Coverage:

$97 per month can give me $300,000 in coverage for 20 years with return of premium on death. The quoted coverage is straightforward and protects against 10 illnesses.

Make sure that when you shop for your insurance needs as a contractor, you don’t overlook key coverage to save a few dollars. Taking care of yourself and your business will ensure that you have a long and prosperous career!