As the weather gets colder and COVID continues to play havoc on our economy, it’s tempting for businesses to let their insurance lapse or cancel.
Running a business comes with risks: A client could file suit against the insured; an employee could get injured while on the job; or an accident or natural disaster could destroy the insureds property and/or equipment. Here are some more reasons why your contractors need insurance:
1) It’s The Law! Some states require contractors to maintain General Liability insurance for their license. If your insured has employees, their state may also require them to maintain workers compensation, unemployment insurance and disability insurance. Failure to maintain insurance could cost your insured their license, or result in expensive fines or penalties.
2) Protection from lawsuits! One claim or lawsuit could put your insured out of business. Legal costs alone can run into the thousands of dollars, even if your insured was found not liable for the claim or lawsuit. Insurance can help protect the insured to continue to run their business successfully.
3) Contracts may require insurance! When it comes to contracts and insurance, several things come in to play, such as:
a. The insured may be required to have insurance for a job they are performing. For example – your roofing contractor was hired to roof an apartment building. The hiring entity will likely require your roofing contractor to have insurance and provide proof of coverage.
b. Your insured took out a loan to purchase equipment, tools, or building(s). The loan agreement usually contains an insurance requirement, along with wanting to be named as Loss Payee, Mortgagee, or Additional Insured on property or equipment that the insured is renting, purchasing, or leasing.
4) A lapse in insurance coverage can be bad! Not only when a claim that may have been covered by insurance is now the insureds sole responsibility, but, insurance companies may apply increased rates due to the lapse in coverage or decline to re-write coverage altogether.
None of us can predict the future! It’s important that your insureds keep continuous coverage for their business, especially during these unprecedented times.
Erickson-Larsen has markets for a wide variety of contractors, restaurants, daycares, truckers, vacant buildings, and many more. For applications or additional information, call our offices at 800-442-3168.
Disclaimer: This article is intended for general information purposes only. The information contained is not intended to constitute and should not be considered legal or professional advice, nor does it represent that coverage does or does not exist for any particular claim or loss under any policy.