We provide solutions to Flooring Contractor Insurance Coverage needs as a Texas business owners!
Flooring Contractors Insurance Creates Solid Footing
Flooring contractors face numerous financial risks. Employees and customers can be exposed to hazardous substances such as silica, asbestos, lead, adhesives, finishing vapors and airborne wood dust. And flooring installers can suffer from back and knee strain, hearing loss and injuries from a carpet knife, tile cutter or table saw.
Add the possibility of being sued by a customer for property damage or having valuable equipment stolen from a work site, and you’re in a risky business.
That’s why talking to an insurance professional about business insurance and workers’ compensation is so important, especially if you’re just getting started. Not every risk can be eliminated, but insurance can substantially reduce your financial exposure and allow you to stay in business in the event of an accident, lawsuit or business interruption.
Commercial General Liability Insurance
Commercial general liability (CGL) insurance is a must have for flooring contractors. In fact, proof of CGL coverage is often required by project owners and general contractors. Banks also require proof of insurance for loans and lines of credit. Your licensing board may require it as well.
CGL covers you and your employees from liability claims in the event damages or injuries occur at a customer’s home or business, on a construction site or on your business premises. CGL helps pay your monetary liability for bodily injury, property damage, medical expenses, and advertising and personal injury. It also covers you against claims of slander and libel, copyright infringement and misleading advertising.
Since a single lawsuit could bankrupt your business, CGL is an essential coverage to have. A CGL policy will pay your legal expenses and damages up to a certain limit. Coverage is based on the size and risk of your business and typically starts at $1 million for a one-year period.
CGL won’t cover you if one of your employees is injured, though. That’s where workers’ compensation insurance comes in. CGL also doesn’t cover professional liability or employment practices liability claims. These additional liability coverages must be bought separately.
Commercial property and auto coverage
Commercial property insurance covers your buildings and their contents, your equipment and tools, and any flooring supplies you store on your premises. Property insurance covers items located at your business address, although some policies may provide limited coverage for property that is transported to or kept at another location. If you have a retail location or showroom, even if it’s leased, you need property insurance to cover the structure and its contents. Your landlord or mortgagor may actually require it.
Flooring contractors should also consider a separate inland marine policy to cover equipment, tools and material when in transit or being stored at a remote site. Installation floater policies can be written on specific projects to ensure that all materials for the project are protected during transit and storage.
You’ll also need to ensure any commercial vehicles you have. Commercial auto insurance works like a personal auto policy, but it has higher liability and collision limits. It also covers any other drivers you name on the policy. This is an important coverage to have if your employees drive company-owned vehicles for work. Keep in mind that if you or someone else is driving a personal vehicle for your business, they might not be covered if they get in an accident. Your company may be held liable if there are damages or injuries to another party. A nonowned commercial auto policy can help in these situations.
Workers’ compensation insurance
Flooring installers may be exposed to hazardous substances, and their work involves repetitive motion that can cause strain and other health issues. There’s also the risk of an accident on the job. For this reason — and the fact that most states require it — you should have workers’ compensation insurance for all of your employees.
Workers’ comp covers work-related injuries and illnesses. It pays lost wages and medical and rehabilitation expenses while the employee recovers. Check to see what your state requires. In many instances, sole proprietors aren’t required to carry workers’ compensation insurance, although you may want to have the coverage anyway.
Premiums are based on the type of industry you’re in, the number of employees you have and your “experience rating,” which is a calculation based on your claims history. High-risk occupations and companies with previous claims pay higher premiums. But you can keep your costs down by creating a safe work environment through health and safety programs.
BOPs and other bundled policies
Small flooring companies may benefit from purchasing their basic coverage in a bundled insurance program known as a business owners policy (BOP). BOPs are a good way to get much of the coverage you need in a single policy at a reasonable price.
BOPs come with at least three standard coverages: CGL, commercial property and business income. Business income, or business interruption insurance, replaces your income if your business can’t operate due to some kinds of natural disasters, fires, explosions, vandalism and another covered perils.
Keep in mind that with a BOP, you usually purchase workers’ comp and commercial auto insurance separately.
If you’re looking for more flexibility and the ability to add other types of coverage, you may be better off with a commercial package policy (CPP). In addition, trade groups often work with program administrators to offer insurance coverage tailored to specific industries.
Finally, if you’re a subcontractor on a large construction project, the owner or general contractor may provide insurance through a wrap-up policy. These are controlled insurance programs that cover all of the subcontractors on the job and usually include at least CGL and workers’ comp. Talk to your agent or broker about your coverage under such an agreement to make sure you don’t have insurance gaps.
Transferring some of your risk to an insurer can save your flooring business from financial ruin. Remember, attorneys fees run high, and even one claim can put you out of business.