Artisan Contractors Insurance FAQ

• At the minimum, artisan contractors need general liability insurance.
• If they have employees they will need workers compensation in most states.
• If they have vehicles registered to the business, or use vehicles for the business purposes, they will also need commercial auto.
• There are also other specialty coverages and endorsements that might be needed based on their operations.

Package policies are the most convenient way to combine coverages. The commercial package policy (CPP) offers flexibility and choices that are appealing to the larger contractors.

However, the smaller contractors are often best served with an artisan contractor businessowners policy because it has been designed specifically for them. A key is that they only require liability coverages but offer property, inland marine and crime coverage options.

Types Of Artisan Contractors Package Policies:

• Artisan Contractor Businessowners Policy (BOP)
• Businessowners Policy (BOP)
• Commercial Package Policy (CPP)

Many contractors do not have the usual location-specific buildings and business personal property exposures. Their business property is more mobile and, therefore, better covered with inland marine coverage forms.

However, for those larger contractors that own buildings and/or maintain business inventory there are many coverage forms and choices available to them.

Types Of Property Coverages:

• Building
• Business Personal Property
• Personal Property of Others
• Improvements and Betterments

Most contractors' property exposure doesn't stay in one place. Instead it moves from the contractor's premises to various jobsites. The property may stay at the jobsite for a time or may just move with the contractor. Property in motion is best covered through an inland marine form.

The perils insured or causes of loss under an Inland marine coverage forms are generally equal to or better than the special cause of loss form that applies to property coverage with most providing earthquake and flood coverage. A contractor should periodically inventory all property to ensure it is all covered on the most appropriate form and that coverage is not duplicated.

Types Of Inland Marine Coverages:

• Accounts Receivable Coverage
• Builders Risk Coverage
• Contractors' Equipment Coverage
• Electronic Data Processing Equipment Coverage
• Installation Coverage
• Scheduled Property Coverage
• Transportation Coverage
• Valuable Papers and Records Coverage

A number of coverages are available under the commercial crime coverage form and policy. A contractor may need only one or two of the coverages because of limited inventory and little on-premises exposure.

When a contractor has employees, the most important crime coverage to consider is employee theft especially if those employees can order inventory, accept payments or disburse funds. If employees regularly work at client's premises, clients' property coverage could be an equally important coverage to buy.

Types Of Crime Coverages:

• Computer and Funds Transfer Fraud Coverage
• Employee Theft Coverage
• Forgery or Alteration Coverage
• Inside The Premises-Theft of Money and Securities Coverage
• Inside The Premises-Robbery or Safe Burglary of Other Property Coverage
• Money Orders and Counterfeit Money Coverage
• Outside The Premises Coverage

Artisan contractors must obtain permits before performing certain types of projects and often must be licensed in order to operate. Many municipalities require bonds to support the promises made to obtain such license or permit. In addition, contractors who perform work for government entities often are required to supply a variety of contract bonds. In a growing number of cases, even some private industry clients are requiring bonds that guarantee performance.

Types Of Surety Coverages:

• Contract-Bid Bond Service Undertaking
• Contract-Bid Bonds
• Contract-Completion Bonds
• Contract-Labor and Material Payment Bonds
• Contract-Performance Bonds
• Contract-Performance of Service or Supply Bonds
• Contract-Subcontract Bonds
• License and Permit Bonds

If a contractor wants to begin or stay in business, liability coverage must be obtained for the premises or operations, off-site locations and products/completed operations exposures. These coverages may be included as a part of a businessowners policy (BOP) or purchased in a commercial general liability (CGL) policy.

Owners and contractors protective liability and railroad protective liability coverages may also be required in certain cases in order for a contractor to obtain a particular job.

Types Of Liability Coverages:

• Commercial General Liability (CGL) Coverage
• Employee Benefits Liability Coverage
• Employment-Related Practices Coverage
• Owners and Contractors Protective (OCP) Liability Coverage
• Railroad Protective Liability Coverage

Artisan contractors may employ individuals who provide services that require errors or omissions coverage. Professional and errors and omissions claims are based on malpractice, errors or mistakes made in the performance of a variety of professional duties.

Because these errors, omissions and mistakes are excluded in the general liability policy, the insured must purchase separate professional liability coverage in order to have full insurance protection.

Types Of Errors And Omissions (E&O) Coverages:

• Architects or Engineers Professional Liability Coverage
• Errors and Omissions Insurance-Miscellaneous Coverage
• Safety and Environmental Consultants Errors and Omissions Coverage

Artisan contractors use their vehicles to get to and from their workplaces and jobsites. They also use vehicles to transport equipment and inventory to those locations. It is important to cover the liability of these vehicles for injury or damage they may cause, as well as to provide coverage for damage to the vehicles themselves.

Types Of Business Auto Coverages:

• Auto Medical Payments
• Business Auto Coverage
• Collision Coverage
• Comprehensive Coverage
• Garagekeepers Coverage
• Hired & Non-owned Auto Coverage (HNOA)
• Uninsured/Underinsured Motorists Coverage

Employers are required to provide coverage for injuries sustained by their employees while on the job. Contractors must comply with these requirements but some try to avoid them by hiring subcontractors. These subcontractors may actually operate and qualify as employees. The relationship between a contractor and its subcontractors must be carefully evaluated in order to determine if workers compensation coverage is still needed.

Casual contractors working on or above navigable waters are subject to the Longshore and Harbor Workers Compensation Act and the policy must have the appropriate endorsement that reflects that situation.

Types Of Workers Comp Coverages:

• Longshore and Harbor Workers' Compensation Act Coverage
• Stop-Gap or Employers Liability Coverage
• Workers Compensation and Employers Liability Coverage

Contractors have significant liability exposures because of the amount of driving they do and the number of client contacts that are made. In addition, there are contractual, subcontractor and completed operations exposures plus those from employers liability. Serious consideration should be made to enhance the primary insurance program with an umbrella or excess liability policy in order to provide sufficient coverage.

Types Of Excess Liability Coverages:

• Excess Liability Coverage
• Umbrella Coverage

Many contractors are entrepreneurs who are receptive and open to new opportunities. They may become involved with international opportunities, financing options and other initiatives. And many are discovering the value of using a drone to assess a job in order to provide an accurate bid.

A contractor may need one or more of the following coverages, depending on their operations and opportunities.

Types Of Specialty Coverages:

• American Expatriate Coverage
• Business Legal Expense Coverage
• Cyber Liability Coverage
• Directors and Officers Liability Coverage
• Environmental Impairment Liability Coverage
• Fiduciary Liability (Pension, Welfare and Employee Benefit Funds) Coverage
• Identity Theft Insurance Coverage
• International Insurance Coverage
• Risk Retention Group Liability Coverage
• Tax Liability Coverage
• Tender Offer Defense Expenses Coverage
• Underground Storage Tank (UST) Liability Coverage
• Unmanned Aerial Vehicles (UAV) (Drones)
• Weather Coverage
• Wrap-Up Coverage