California Contractors Need The Following Insurance
Coverage for Third Party (GL): The purpose of general liability insurance is to pay for any injuries in case your customers are hurt on your property, since this coverage will pay their medical bills. General liability also pays for repairs when a customer’s personal property is damaged at your workplace. For instance, if someone damages his or her car in your parking lot, this coverage can pay for the repairs. Without this part of your California contractor insurance, you would have to pay for any medical bills or property damage repairs on your own, which could bankrupt your business.
Tools & Equipment Coverage (BOP): Tools are essential in the construction field, which means you need to protect them at all costs. You never know when they could be lost, stolen, or damaged, leaving you and your employees without a way to do the job. That’s where tools and equipment coverage comes in, since it pays to replace any items you need to complete your work as a contractor. Note that this coverage extends to both rented and purchased tools and equipment that you have to use in your line of work.
Employee Coverage (WC): Whether you have a few employees or several people working for you, your California contractor insurance needs to include workers compensation. Most states require this coverage because it pays the medical bills of any employees who are injured or sick due to the job. It also pays for their missed income, as well as any legal fees incurred if they bring a lawsuit against you after getting injured or ill due to work.
Business Vehicle Insurance: If you need to drive for business at any time in California, you need to add business vehicle insurance to your contractor policy. You cannot rely on your personal car insurance policy to pay for the damages when you cause a car accident while driving for business, so you need a separate policy as part of your California contractor insurance. You should ensure that your employees are also covered under your business vehicle insurance if they ever drive for you while on the job.
Bond: Having a surety bond can improve your appeal as a contractor, because it guarantees your services. What this means is that if you do not fulfill the requirements set out in your contract, you have to pay an agreed upon amount.