Contractor standing on ladder financially protected by insurance if he were to fall

Protect Your Small Business with Contractors Insurance

As a contractor, you understand that accidents are bound to happen. Whether working on a construction site, performing maintenance, or even picking up a tool, you risk causing damage or injury. And in today’s litigious society, those risks can quickly translate into expensive legal battles if you need to be properly insured. In this blog post, we’ll explore different types of insurance for contractors and why it’s crucial to protect your business by obtaining the right coverage.

Public Liability Insurance

Public liability is the most common type of contractor insurance. It protects against claims of bodily injury, property damage, and personal injury that third parties may sustain due to your actions or the actions of your employees while working on a project. For example, if a client trips over a tool left on the ground during construction and suffers an injury, public liability insurance would cover the medical expenses, legal fees, and any other costs related to the claim. Learn more about this policy type in our article on public liability insurance for small businesses.

Professional Indemnity Insurance

Professional indemnity insurance is also known as errors and omissions insurance. This type of insurance protects contractors from claims related to negligence, errors, and omissions that result in financial losses to their clients. This type of insurance is particularly important for contractors who provide consulting, design, or other professional services and advice to clients. Suppose you make a mistake or omission in your work, which damages your client’s property, or they incur financial losses. In that case, this type of insurance can help cover the costs of any damages and legal fees incurred due to the claim.

Commercial Auto Insurance

If you or your employees drive vehicles for work, you will need commercial auto insurance. This type of insurance protects against accidents and provides liability coverage for damage or injury caused by vehicles used for business purposes. If you rely on your auto insurance policy, it may not cover claims resulting from accidents while on the job. Commercial auto insurance provides peace of mind, knowing you’re protected if an accident occurs while you’re on the job.

The Benefits of Contractor Insurance

Contractor working on wooden roof frame

Protects Your Business Assets

Contractor insurance offers a range of coverage options that protect against losses that could harm your business. For example, you can get coverage for your commercial property, vehicles, tools, and equipment. Additionally, you can get general liability insurance, which protects you against third-party claims for property damage, bodily injury, or advertising injury. With these coverage options in place, you can rest assured that your business assets are protected against losses outside your control.

Helps You Win Jobs

Having contractor insurance can give you a competitive edge over other contractors who don’t have insurance. Many clients and contractors require you to have insurance before hiring you. By having the protection in place, you show your potential clients that you’re a reliable and professional contractor who takes their job seriously. Additionally, your insurance coverage can help you win bids as it demonstrates that you’re a low-risk business and have financial protection in place.

Covers Your Employees

If you have employees, workers’ compensation insurance is a legal requirement in most states. Workers’ compensation insurance covers your employees’ medical expenses, lost wages, and disability benefits in case of an on-the-job accident or illness. This insurance is essential for protecting your employees and your business from costly lawsuits and legal fees.

It provides Peace of Mind.

Lastly, contractor insurance can give you peace of mind, knowing you’re protected against unforeseen losses. With the right coverage options, you don’t have to worry about the financial impact of an accident, natural disaster, or third-party claim. Instead, you can focus on growing your business and delivering quality client work.


As a contractor, you need the right types of insurance to protect your business and finances. Obtaining the right level of coverage can take time and effort, and costs will vary based on the level of coverage you need and the size of your business. If you need help determining which types of insurance you need or what level of coverage suits your business, contact a knowledgeable business insurance broker to help guide you through the process. 

Frequently Asked Questions about Contractors Insurance

Can contractor insurance be tailored to fit specific project needs?
Yes, many insurance providers offer customised policies to match the unique requirements and risks associated with individual projects or jobs.

How does contractor insurance differ from general business insurance?
Contractor insurance is designed specifically for risks encountered by contractors, like job site accidents, errors in work, or professional advice. General business insurance typically covers broader business operations not specific to contracting work.

Is contractor insurance mandatory to operate in the industry?
While it may not always be legally mandatory, many clients or project owners may require contractors to have specific insurance before allowing them to work on a project.

If I hire subcontractors, are they covered under my policy?
Typically, subcontractors should carry their own insurance. However, some policies may allow for the inclusion of subcontractors. Always clarify this with your insurance provider.

Are legal fees covered in the event of a lawsuit?
Yes, most liability insurance policies will cover legal fees up to the policy’s limit in the event of a covered lawsuit.

What’s the difference between “claims-made” and “occurrence” policy types?
“Claims-made” policies cover claims made during the policy period, regardless of when the incident occurred. “Occurrence” policies cover incidents that occur during the policy period, regardless of when the claim is filed. Choose based on your business’s risk factors and consultation with an insurance agent.

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Daniel Ufer

Daniel is a business insurance broker that specialises in providing tailored advice, competitive premium and risk mitigation tactics to his clients. Daniel has received multiple awards that include: ADVISR Insurance Broker of the Year - Peoples Choice (2nd), ADVISR QLD Insurance Broker of the Year (Finalist), ADVISR Thought Leader (Finalist), APAC Most Dedicated Insurance Broker

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