Business owner's policy for construction contractors

A business owner’s policy (BOP) protects construction businesses and contractors from common business risks by combining your general liability insurance with a commercial property insurance policy. It helps pay for accidents involving customers and incidents that damage your business property.

A BOP can cover the cost of:

• Lawsuits related to a customer's injury
• Lawsuits related to accidental damage to customers' personal property
• Lawsuits related to slander, copyright infringement, and other advertising injuries
• Equipment, tools, and other business property that is damaged or stolen from your company's main location

Small, low-risk businesses usually qualify for a BOP. That might include:

• A freelance handyman who works with residential customers
• A home inspector who works independently
• A locksmith business with half a dozen employees

Construction business owners can work with an insurance agent to tailor a BOP to meet their specific needs.

For example, you may want a policy that includes business interruption insurance. This coverage helps pay for operating expenses and lost income if your business is forced to close temporarily due to a fire or other covered property claim.

You can also add inland marine insurance for towed equipment or high-value equipment, such as a backhoe or forklift.

Insurance agents often recommend a BOP for its affordability and broad coverage. Most policies cover the following:

The general liability coverage portion of a business owner’s policy can pay for medical bills, legal costs, and other expenses related to third-party bodily injuries or property damage, such as:

• A property owner who trips over an electrician's toolbox
• Accidental damage to a fence during a debris removal project
• Scratched floors from an appliance repair job

The general liability policy portion of a BOP also protects contractors and construction businesses against advertising injuries, such as:

• Defamation, both libel (written) and slander (spoken)
• Copyright infringement

For example, if your business writes a negative social media post about a competitor and is sued for libel, general liability insurance could help pay the resulting legal fees.

The commercial property coverage in a BOP protects:

• Construction equipment, tools, and materials, like a welding machine
• Office furniture and fixtures
• The building, if you own it

If your tools are stolen or a fire breaks out at your company's office, your business owner’s policy will help you recoup your losses by paying for repairs and replacement items.

If your business is forced to close temporarily, the loss of income could be devastating. Business interruption insurance protects your business from the financial impact of a forced closure by paying for lost revenue, rent, payroll, and other operating costs.

For example, if a windstorm damages the roof of your building, allowing rain to seep in and soak your building materials and tools, business interruption insurance can cover day-to-day business expenses until the restoration is complete. That gives you time to replace damaged equipment and supplies without going out of business.

Speak to a licensed Insureon agent to add this additional coverage to your BOP.

A business owner's policy covers the most common risks of running a small business, but it doesn't cover every incident or lawsuit. Construction small business owners and contractors should also consider these types of insurance:

Workers’ compensation insurance: Workers’ comp covers medical expenses for work-related injuries and illnesses. Most states require this type of coverage for businesses with employees.

Commercial auto insurance: A commercial auto policy covers the cost of an accident involving your business vehicle. Almost every state requires this coverage for business-owned vehicles.

Contractor’s tools and equipment insurance: This policy helps pay for repair or replacement of a contractor’s equipment and tools if they are lost, stolen, or damaged.

Professional liability insurance: This policy covers professional mistakes and oversights, such as a contractor missing a deadline for a project. It's also referred to as errors and omissions insurance (E&O).

Surety bonds: These bonds reimburse your clients for financial losses if your company is unable to fulfill the terms of its contract.

Builder’s risk insurance: Builder’s risk insurance can pay for damage done to a structure still under construction, such as a fire or vandalism at a construction site.

Cyber insurance: Any construction company that handles sensitive information, including customers' credit cards, should invest in this policy. Also known as cyber liability insurance or data breach insurance, this coverage helps businesses recover from a data breach or cyberattack.

Contractors pollution liability (CPL) insurance: This type of environmental insurance covers pollution liability risks for contractors and subcontractors.

Additional insured endorsement: This extends insurance coverage to anyone other than the policyholder, and can be required by clients, contractors, and subcontractors depending on the project or contract.

Are you ready to protect your small construction or contracting business with a business owner’s policy? Complete Insureon’s easy online application today to get free quotes from top U.S. carriers. Once you find the right small business insurance for your company, you can begin coverage and get a certificate of insurance in less than 24 hours.