The building framing industry consists of foundation, building and wood contractors; post-frame contractors; steel framing contractors; and those who work on wood frame component fabrication on-site. It is an industry that is currently enjoying growth in both revenue and employment as the rebounding economy has led to increased investor confidence and more building construction. If you are an independent framing contractor or run a business that does subcontract work, you will want to be sure to protect your finances with a suitable framing insurance portfolio.
2014 Framing Contractors Industry Facts From IBISWorld
- There are currently 26,487 framing contractor businesses operating in the U.S.; of these:
- 11,983 are wood framing contractors.
- 14,504 are steel framing contractors.
- These framing businesses employ approximately 138,000 people.
- The framing contractor industry generates about $18 billion in revenue each year.
Liability Coverage: The Most Important Part of Your Framing Insurance Portfolio
Hands down, the most important aspect of your coverage portfolio is commercial general liability insurance. Simply put, you cannot work without it. Not only is it required in many states in order to be licensed, buy anyone who hires you to do framing work on their building or project will want to see proof of liability insurance before they will allow you to work for them.
A general contractor who hires you as a subcontractor will most likely require that you add them to your liability coverage policy as an additional insured for the duration of the framing job. Likewise, if you hire subcontractors to work for you, you should require them to add you to their coverage. In this way, coverage is complete all the way up the line of responsibility.
Commercial general liability insurance provides coverage for many of the liability exposures you will have as a framing contractor. This insurance covers injuries and property damage that you may cause to third-party interests while doing your framing work. What this insurance will not cover, however, is damage you cause to your own work or interests due to incompetence. Therefore, if an error in your framing work forces you to redo your work, that expense is on your company. However, if that same error forces other subcontractors to also have to redo what they have done, your insurance is likely to cover their losses.
While commercial general liability insurance is the meat of your policy coverage, there are other liability coverage types that you should discuss with your independent insurance agent. These include:
- Commercial auto liability coverage: It is likely that your framing business has a company-owned vehicle or vehicles used for transporting tools and materials to and from the job sites. In this case, these vehicles would need to be covered by a commercial auto insurance policy. If you have employees who transport materials to the job site in their own vehicles or use their own cars to run company errands, your framing contracting business can be on the hook for liability charges if an employee is in an accident while on the clock. You can protect your business interests with hired or non-owned vehicle insurance.
- Employment practices liability coverage: If you have employees working for you, there is always the chance that you can be sued for a perceived illegal business practice such as discrimination or wrongful termination. This insurance, frequently referred to as EPLI, shields your business from financial losses if this should happen.
- Umbrella insurance coverage: This extra liability insurance is particularly important for those in the framing contractors industry. Because mistakes made on the job can lead to overwhelmingly large liability claims, it is quite likely that your insurance company will not offer coverage in amounts sufficient to fully protect your business. Further, whoever hired you to do the job may require that you carry a minimum amount of liability insurance that exceeds your policy’s coverage limits. In this case, umbrella liability insurance provides you with the coverage you need at an affordable rate.
Your Framing Insurance Portfolio Must Include Workers' Compensation
Another type of insurance that your employers are likely to require you to carry is workers' compensation insurance. While it is already required of employers in most states, proof of this coverage may be needed before you can allow your employees to start working at the job site.
This coverage is particularly important in the framing contractors industry, where the work is dangerous and injuries are likely. Your independent insurance agent can help you find a workers' compensation insurance provider who specializes in covering injuries at work sites so that your insurance company can be a helpful resource for safety protocols.
In addition, the hiring contractor may require you to obtain a waiver of subrogation through which your insurance company agrees not to go after them to recoup losses after paying out for workplace injuries.
What You Should Know About Framing Insurance Property Coverage
When you are working at a job site, you will have lots of tools and other business property that will need to be insured against damage and theft. Fortunately, if you are working on new building construction, as is typically the case with framing contractors, your employer or the top contractor will have likely purchased a builders risk insurance policy, which covers property on the job site, including, in most cases, the property owned by your business.
If you are working on an existing building or if, for some reason, you are not covered by a builders risk insurance policy, you may need to purchase an installation floater, which is part of inland marine insurance. It covers what is being installed in a building and protects the property and interests of the contractor, both on-site and in transit, for the duration of the job contract. Additionally, you can purchase contractors equipment insurance to cover your tools and equipment.
Extra expense insurance can also be useful to your business if you have a centralized office location. If your central office is damaged by a disaster such as a fire, your business can continue operations as your jobs are done off-site. Extra expense insurance covers the cost of renting temporary office space until you can move back into your regular location.
Get Help Building a Strong Framing Insurance Portfolio
Purchasing commercial insurance for your framing contractor business can be a complex process. You want to be sure that you have all the coverage you need in amounts that are sufficient to protect your business from large financial losses. For this reason, you can greatly benefit from working with an independent agent in the Trusted Choice® network. An agent who is experienced with contractors insurance can help you realize your risks, recommend suitable policies to cover those exposures and ensure that you are getting the coverage you need at a competitive rate. Find a Trusted Choice agent near you to learn more so you can soon start building a comprehensive framing insurance portfolio.