Artisan Contractor Insurance Risks To Protect Against

A single setback could mean significant financial loss without the right business insurance policy covering you. Understanding artisan contractor insurance risks allows you to make informed decisions and secure proper protection. This guide outlines the top five risks contractors face and the best coverage solutions to safeguard your business.

1. Bodily Injury: Protecting Your Business From Liability Claims

Even if you follow strict safety protocols, accidents happen—and when they do, they can lead to expensive liability claims. Whether it’s a client slipping on a wet floor, a pedestrian tripping over your tools, or an injury caused by falling debris, bodily injury claims can result in hefty medical bills and legal fees.

How to Stay Protected: General liability insurance covers medical expenses, legal defense, and settlement costs if someone is injured due to your work. Without this protection, you’d be paying out of pocket for hospital bills, lost wages, and lawsuits, which could drain your business finances quickly.

Real-World Application: A painter leaves a ladder unattended on a job site. A client accidentally bumps into it and falls, fracturing their wrist. General liability insurance would cover the medical costs and legal fees if the client sues.

2. High-Cost Property Damage: When General Liability Isn’t Enough

Some property damage claims exceed standard general liability limits, leaving contractors with significant out-of-pocket expenses. If a contractor’s work leads to a structural collapse, severe water damage, or a fire caused by faulty wiring, damages can quickly surpass policy limits—potentially leading to lawsuits or financial ruin.

How to Stay Protected: Umbrella insurance provides additional coverage when general liability insurance is maxed out. This policy ensures that major claims—like severe property damage—don’t drain your assets or force you into expensive legal battles.

Real-World Scenario: An electrician installs faulty wiring in a commercial building, leading to an electrical fire that causes millions of dollars in damage. The contractor’s general liability policy maxes out at $500,000, leaving them exposed. Umbrella insurance covers the remaining costs, preventing personal financial liability.

3. Equipment Theft or Damage: Keeping Your Tools Protected

Artisan contractors depend on their tools and equipment to get the job done—but these valuable assets are often at risk of theft, loss, or damage. Whether tools are stolen from a vehicle, lost at a job site, or damaged in transit, replacing them can be expensive and disrupt your ability to work.

How to Stay Protected: Commercial property insurance provides financial protection against damage or loss of business-owned buildings, equipment, and tools. For contractors, this means coverage for workshops, storage units, and high-value assets. Inland marine insurance further safeguards tools and mobile equipment transported between job sites, while business interruption coverage ensures financial stability if operations are disrupted due to property damage.

Real-World Scenario: A carpenter parks their truck at a job site overnight, only to return in the morning and find thousands of dollars worth of tools stolen. With inland marine insurance, they’d be able to replace their stolen tools without paying for everything out of pocket.

4. Employee Injuries: The Importance of Workers’ Compensation for Contractors

Whether you’re a solo artisan contractor or run a small team, workplace injuries are always a possibility. Construction, electrical work, and plumbing involve high-risk tasks, and a single fall, laceration, or back injury could leave an employee out of work for months.

How to Stay Protected: Workers’ compensation for contractors covers medical expenses, lost wages, and rehabilitation costs for injured workers. Without it, you could be responsible for paying out-of-pocket for medical bills or even face lawsuits from injured employees.

Real-World Scenario: A roofing contractor’s employee slips and falls from a ladder, suffering a serious back injury. Contractor workman’s comp insurance would cover their medical treatments, physical therapy, and a portion of their lost wages while they recover.

Bonus Tip: In most states, workers’ compensation laws require businesses with employees to secure workers’ comp insurance coverage, so not having it could violate state laws and lead to fines.

5. Missed Deadlines and Contract Disputes: Protecting Against Legal Battles

Artisan contractors often work under strict deadlines and contracts, and unforeseen delays (such as supplier shortages, weather issues, or client disputes) can lead to legal battles over project completion. A dissatisfied client may claim negligence or seek financial damages, even if the delay was beyond your control.

How to Stay Protected: Professional liability insurance provides financial protection against negligence claims, contract breaches, or mistakes in your work. It covers legal fees, settlements, and court costs, ensuring disputes don’t derail your business. Errors & omissions (E&O) insurance is a specialized form of professional liability coverage specifically addressing claims related to work errors, missed deadlines, and contractual issues.

Real-World Scenario: A contractor is hired to install custom cabinetry but faces material shortages, delaying the project for weeks. The client sues for breach of contract, claiming financial losses. E&O insurance helps cover the legal costs and potential settlement.

Now that you understand the artisan contractor insurance risks you must avoid, explore expert advice on choosing a policy that protects you from them.

Policy Choosing Tips

How Insurance Mitigates Artisan Contractor Insurance Risks

Now that you understand the top artisan contractor insurance risks, the next step is ensuring you have the right coverage to avoid costly setbacks as a business owner. Here’s how the right policy provides end-to-end insurance protection:

Financial Protection: Covers lawsuits, medical bills, and property damage, preventing you from paying out of pocket.
Peace of Mind: Knowing you’re insured lets you focus on your work instead of worrying about potential liabilities.
Compliance with Laws: Some policies carry a legal requirement in most states, making it crucial to keep up with changing insurance protection laws.
Business Continuity: The right coverage ensures that an accident, lawsuit, or theft won’t force you out of business.

Rely On Bly Insurance Group to Craft a Custom Policy that Safeguards You From Risk

Bly Insurance Group understands the unique challenges artisan contractors face, from liability claims to property damage and contract disputes. With years of expertise in crafting customized insurance policies, we ensure your business is protected from financial setbacks. Contact us today for a free quote, and let’s build a policy that safeguards you from artisan contractor insurance risks.