Licensing requirements and insurance coverages can be overwhelming for new or experienced contractors. On top of that, every state has different business insurance regulations. But, no matter where you’re at, these are six contractor insurance coverages you should consider.

1. General Liability Insurance for Contractors 

Contractor liability insurance is the mainstay of every contractor's policy. It is the insurance safety net and minimum requirement before signing a contract for any job.

Most states and jobs require a minimum of $1 million of coverage. This is because you are not just covering your project, you are covering the potential damages to the building you are working on. So, even if you are only installing $1,000 worth of tile, you need to understand that the tile may cause potential damage far beyond the value of that tile. 

2. Per Project Aggregate Coverage 

Per Project Aggregate is essential, especially if you are an owner-only business.

For example, let’s say you’re helping on a big project. Unfortunately, your work ends up causing damage to the project and you are legally liable. Later in the policy term, you’re working on another project and your work causes damages again and you are legally liable. Since, these happen in the same policy term you may not have coverage for your second claim. To avoid this, consider the per project aggregate which covers your liability per individual project. 

3. Errors & Omissions Coverage (E&O)

No matter how careful you are with your own work, mistakes happen. With E&O coverage, you can have the peace of mind that one mistake will not ruin your business.

For example, let’s say you’re renovating an old Victorian house for a new client. They want you to refinish and wax the wood floors. Unfortunately, you’re fatigued from your very busy week and you accidentally use the wrong wax on the floors.

This one mistake can cost you unless you have coverage from an Errors and Omissions policy. Many carriers don't offer E&O to contractors, but Auto-Owners does for certain classes of business (see below).

Classes of Business that Qualify for Contractors Errors & Omissions Coverage: