Ask an Agent: Contractors Insurance
Tuesday, June 6, 2017/Industry Tips
According to design-build general contractor DBS Group, 2017 is slated to be a good year for construction workers. The company's Trend Report anticipates growth in:
- Retail construction (3 percent).
- Warehouse construction (2 percent).
- Office space construction (10 percent).
- Multi-tenant construction (13 percent).
An uptick in construction can be a sales opportunity for you. We talked to Mark Trujillo, an Insurance Noodle producer who specializes in contractors, to get the insider’s take on contractor insurance. Here’s what he says you need to know.
Common Policies for Contractors
Construction sites are dangerous places. In fact, the most recent OSHA statistics show that the construction industry accounted for 937 of the 4,379 private sector fatalities in 2015. And it's not just employees who can suffer injuries on a construction site. Your client's visitors, like delivery drivers and business partners, may also face some risk.
Contractors need to protect themselves against lawsuits over bodily injuries sustained on their job sites. To safeguard contractors from these suits, Trujillo recommends insurance agents talk to contractors about General Liability and Worker's Compensation Insurance.
Additionally, Trujillo suggests that Noodle members discuss Professional Liability Insurance, also called Errors & Omissions Insurance, with contractor clients. For example, if a client works in property preservation, they may need this policy to cover professional negligence.
Finally, Trujillo says you might also want to consider a construction business's unique property concerns. For instance, standard Commercial Property Insurance usually doesn't cover your client's expensive backhoe loaders and compact excavators. Instead, discuss Inland Marine Insurance with your client. (Related reading: "Mythbusters: What's the Difference between Inland Marine and Builder's Risk Insurance?")
Tips for Quoting Contractors Insurance
With so much potential for bodily harm or fatalities, covering contractors can be tricky. Luckily, Insurance Noodle has solid markets for construction risks. Members can get quotes quickly, often within one business day.
Trujillo says you may be able to improve your chances of getting a quote for contractor's insurance by submitting clients with:
- At least two years’ experience.
- A clean claim history.
- Exterior work limited to three stories or fewer.
He goes on to say that you also want to provide a full description of your client's business operations. For instance, you may want to ask about:
- The number of employees.
- Their specific services.
Getting this information in the original submission helps insurers decide if they can offer coverage.
Safety Tips for Contractors
You can provide more value to your clients beyond selling insurance by offering helpful safety tips to contractor clients. For instance, OSHA advises construction workers to:
- Secure scaffolds to prevent falls
- Avoid using ladders with metallic components near electrical work
- Inspect hard hats for damages
- Pile materials in a way that prevents it from tipping, falling, rolling or spreading.
Check out OSHA's "Worker Safety Series" post for an extensive list of construction worker safety tips. You can offer these and others to clients in a blog post or agency newsletter.
Whether you’re offering key safety advice or finding the right policy for your clients, you can go above and beyond to help your clients. Read "Independent Insurance Agents: Think 'Value,' not 'Price'" for more ideas.