Residential remodeling companies come in all shapes and sizes and do a variety of different types of remodeling projects—from simple, single-room jobs to complicated build-outs and complete rebuilds.
The risks that individual residential remodeling contractors face are as unique as the projects they do. Accidents and property damage in the course of doing business can happen at any time.
Residential remodeling insurance is one way to protect your business from the devastating costs and disruption these incidents can cause.
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Why Do I Need Residential Remodeling Insurance?
Residential remodelers do everything from designing new spaces to demolition and completing every phase of a build-out. You might use your own employees for much of the work, and you might also use several subcontractors who help you get the job done right.
In the course of any remodeling project, you are exposed to a variety of risks that can cost you a tremendous amount of money. You need residential remodeling insurance to protect your livelihood from things like:
- Property damage, theft, or vandalism to your tools, vehicles, and equipment
- Worker injuries
- Lost income due to property damage or some other type of work stoppage
- Lawsuits for causing damage to a home or causing injuries to a homeowner
- Car accidents involving your business-owned vehicles
What Does Residential Remodeling Insurance cover?
Residential remodeling insurance is not a single insurance policy. It is a wide range of insurance products designed for general contractors, homebuilders, remodelers, carpenters and other types of construction firms.
Remodelers insurance helps you minimize costs related to employee injuries, equipment and materials damage, motor vehicle accidents, lawsuits, and more.
Not every residential remodeler has the same insurance needs. Your comprehensive remodeling insurance program should be based on the size of your business, the number of people you employ, and the type of work you perform.
Liability Insurance for Residential Remodelers
One of the biggest risks you face as a residential remodeler is the damage that you can do while you are inside someone’s home. Not only are your own workers demolishing old walls and finishes and installing new ones, but the outside contractors you hire can cause problems, too.
You are ultimately responsible if a homeowner’s property is damaged, such as if a plumber causes a leak that destroys the floor beneath. If someone at the job site is injured because of careless work or behavior by an employee or subcontractor, you will take the blame.
- What if a ladder fell down and smashed through a homeowner’s window? You’d need insurance to cover the cost of the property damage.
- What if a homeowner tripped over a tool or materials left in an unsafe spot in the home and broke her ankle? You’d need insurance to pay for her medical bills and any other related expenses.
- What if one of your workers caused a car accident while driving one of your trucks on the way to a job site, damaging another car and injuring the driver? You’d need insurance to pay to for repair of the damaged car and your own truck, and for the injured person’s medical bills.
Several different types of business insurance policies can help:
- Commercial general liability (CGL) insurance protects you from the costs of liability claims and lawsuits. It can help you pay for property damage, medical bills, and attorney fees, court costs, settlements, and judgments.
- Commercial auto insurance covers your vehicles and drivers in the event of an accident or other types of vehicle damage.
- Commercial umbrella insurance can cover you for claims that exceed the limits of your other liability policies.
Property Insurance for Residential Remodelers
Your tools and equipment are your most valuable asset. Without them, you could not perform the work you have promised.
You need to protect your valuable tools and equipment, whether they are at your shop, on the way to a job site, or on a trailer at the site until the project is completed.
- Commercial property insurance covers your office space, shop, warehouse, or other buildings and their contents from losses due to fire, theft, vandalism, wind, hail, and other losses that can occur.
- Business interruption insurance reimburses you for lost income and helps pay for certain ongoing expenses if you are temporarily unable to operate due to a covered loss (fire, weather, vandalism, etc.).
- Inland marine insurance protects your equipment, tools, portable computer equipment, and other supplies from theft, loss, or damage while they are in transit to and from worksites.
- Builders risk insurance covers your business property (tools, equipment, building materials) while at a construction site. It also covers the structure that is under construction. It pays for losses due to fire, theft, vandalism, hail, and so on.
Do Residential Remodelers Need Professional Liability Insurance?
Professional liability insurance, or errors and omissions insurance, has traditionally been for professional services firms like attorneys and accountants. But the need for this type of coverage has been expanding in recent years as all kinds of businesses have been sued because of some type of mistake or error in the advice or services they provide.
If you are a residential remodeler who takes part in the design process for your clients, you should at least explore with your agent whether you need professional liability coverage.
If you design new spaces for your clients, or even subcontract to a design firm, the ultimate responsibility for the design phase of a project may lie with you.
If something goes wrong because of a flawed design or professional advice that you give, (e.g., a design is structurally unsound), you could be sued. You could even be sued for omitting a key piece of information, or somehow failing to fully explain an option and all of the potential risks.
An independent agent who has experience working with residential remodelers can help you assess your needs and help you determine if you need this type of coverage.
What Are Contractor Bonds and Do I Need them?
You might need a variety of contractor bonds, or surety bonds, depending on the size and scope of the projects that you work on. Bonds are very important for contractors who work on commercial building sites, but you may still need certain types of bonds even for residential work.
Contractor bonds can be essential for finding, securing, and performing work. They are typically used to guarantee some aspect of the bidding process or building project and ensure that the project owner knows that you are fully licensed, insured, and prepared to complete the project as promised.
Every type of bond is unique and tailored to a specific project. While you may not need them for every residential job, you should know what they are and be prepared to obtain them if required.
How Much Does Residential Remodeling Insurance Cost?
Residential remodeling insurance costs will vary depending on the size of your business, the number of employees you have, and how much business property (buildings, tools, and equipment) you have.
If you own a shop or warehouse building and several trucks, you’ll pay more than a remodeler who has only a small office space and a single work vehicle. If you do all of the work yourself, you’ll certainly pay less than a remodeler with several employees and subcontractors on the payroll.
An independent agent who has experience working with different types of contractors can help you decide the types and amounts of coverage you need for your remodeling business. The choices you make will determine your cost of coverage.
Find and Compare Quotes
An independent agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice.
Benefits of an Independent Agent
Our agents simplify the search process for finding the right residential remodeling insurance. They’ll walk you through some handpicked policy options and explain the details.
Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately.
The Lowdown on Online Quotes
Online quotes can be tempting. They are fast and easy to get—but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you.
Online quotes can’t and don’t see the whole picture. They can leave out important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of.
Instead of getting an online quote, find an independent agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs.
TrustedChoice.com Article | Reviewed by Paul Martin
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