Commercial Auto Insurance
Flooring contractors need to get tools, equipment, and supplies to and from job locations. The way to do this is with a work truck or van. If you’re using a personal vehicle for work, personal auto insurance might not cover losses if there is a work-time accident. Instead, you should have a commercial auto insurance policy.
Commercial auto insurance pays for the liability that happens in at-fault accidents. If you have comprehensive or collision coverage with the policy, you also have protection for your own work vehicle as well. For example, if you accidentally hit another car on your way to a job site and injure the other driver, you are liable for his injuries. Your commercial auto insurance policy pays for those injuries, and collision coverage pays to repair your work truck.
Surety bonds are a guarantee that you will perform your contractual obligations to clients. A surety bond is not really insurance, but instead an agreement between you and the insurance company that if there is a claim, the insurance company will pay the client, and you will repay the insurance company. Surety bonds are available for a nominal fee since you are still liable for the amount paid out.
Flooring installers can get a surety bond to become a “bonded company,” making them more professional and attractive to clients. Some local state and county licensing boards may require a surety bond; however, if you aren’t required to have a license as a flooring contractor, you likely aren’t required to get one.
Your general liability insurance policy has limits. When buying the policy, they may be as little as $100,000 or as high as $1 million, depending on what you select. Some claims may exceed these limits. If a claim goes above the policy limits, you are still liable for the difference. For example, if you have $1,000,000 in liability coverage but the claim is for $1,500,000, you are still on the hook for $500,000.
Excess liability insurance is a policy you can get relatively inexpensively to be that secondary policy to pay the difference for higher claims.