You know you need insurance—but how much is enough?
On one hand, you want to protect your growing construction empire.
On the other hand, you don’t want to tie up cash in insurance when your work truck is on life support, your employees need paychecks, and that shiny new piece of equipment isn’t going to buy itself.
Good news: With the right coverage (and none of the fluff), you can protect your business
and keep your wallet happy.
Here are 10 smart questions to help you figure out how much insurance your contractor business needs.
If your business structure is “just you,” congrats—you’re also putting your personal assets on the line every time you take a job.
Here’s the fine print: As a sole proprietor, the IRS says you’re personally liable for your business’s financial obligations.
Translation: If someone gets hurt or property gets damaged, their lawsuit isn’t just coming after your business—it’s coming after your personal bank account, your car, even your house.
🛑 Solution: A general liability policy is your best friend. It’s a must-have for protecting your personal and business assets.
Let’s be real: Most contractors don’t have $20,000 lying around for a slip-and-fall lawsuit.
General liability insurance covers the legal fees, court costs, and settlements that come with being in a high-risk industry.
Even if you’re not at fault, defending yourself can be ridiculously expensive.
💡 Pro Tip: If you can’t afford multiple lawsuits without going broke, make sure your general liability policy is always up to date.
3) Do You Use A Website Or Social Media?
If you’re marketing your services online (and you should be), you’re opening yourself up to a new kind of risk: advertising injuries.
What’s that?
It’s when someone claims your tweet, blog, or Facebook post violated their copyright or defamed them.
Without coverage, that “innocent” meme you posted could cost you thousands in legal fees.
📱 Fix it fast: General liability insurance can also cover these risks. Post responsibly—but stay covered just in case.
Got employees?
Then you’re responsible for their safety on the job. In construction, that means protecting them from serious injuries—and protecting yourself from the financial fallout if something happens.
Workers’ comp insurance covers medical bills, lost wages, and more for injured employees.
It’s not just the right thing to do; in most states, it’s the law.
🤝 Play it safe: Keep your workers’ comp policy current to stay legal and protect your team.
If your work truck doubles as your personal vehicle, don’t assume your personal auto policy has your back.
Once you start hauling tools, equipment, or supplies—or letting employees drive your truck—you’re in business territory, and personal auto insurance won’t cut it.
🚚 Solution: Commercial auto insurance protects your vehicle, your tools, and your business from road hazards.
If you’re handing over the keys to your crew to grab lunch, deliver materials, or pick up supplies, you’re taking on extra risk.
Your personal auto policy likely won’t cover work-related accidents when employees are behind the wheel.
🚗 Fix it fast: Commercial auto coverage is a must to avoid out-of-pocket expenses for accidents involving your employees.
Your tools are the lifeblood of your business.
Could you afford to replace your generators, welders, or bobcats if they were stolen or damaged?
🛠️ Don’t sweat it: Inland marine insurance protects your high-value equipment, whether you own, rent, or borrow it.
Picture this: A fire, theft, or storm destroys the materials you’ve left on-site.
Can you afford to replace them out of pocket?
🌪️ Stay prepared: Builders risk insurance covers materials, supplies, and even the cost of cleanup after a disaster.
Cash flow is king, and you need yours to grow your business—not to cover unexpected disasters.
💡 Pro Tip: If you’re worried about claims exceeding your policy limits, umbrella insurance gives you extra protection without breaking the bank.
Your business evolves, and so do your insurance needs.
The easiest way to ensure you’re covered (without overpaying) is to meet with your broker regularly.
🎯 Pro Move: Your agent can help you find missing coverage, update your policies, and even unlock discounts on premiums.