The House Insurance Built
Risk Management for Builders & Contractors

Chapter 2: Understanding Construction & Contracting Insurance Policies

As a sole proprietor or independent contractor, you may think that your business is too small to need business insurance. But businesses of all sizes can be sued. And as we've mentioned, if your business is not registered as a limited liability corporation (LLC), you are personally liable for all your business's losses.

In the event of a lawsuit, you'd be responsible for paying your attorney's fees and damages out of pocket. That amount can be enough to bankrupt most small businesses that don't have insurance — incorporated or not.

Plus, consider the staggering fact that almost 40 percent of small businesses fail to reopen after a disaster, according to FEMA's article, "Protecting Your Businesses." If you want your business to survive a storm or fire, you'll need business insurance to raft you through the unpredictable whims of human nature and Mother Nature.

Turns out premium rates are a small price to pay for financial security and the continuation of your contracting businesses. That's why it's important to think of appropriate coverage as an investment in your business — not as an expense.

In this chapter, we take a closer look at the most essential policies for construction and contracting businesses — whether you are a one-person shop or at the helm of a growing business. But first, let's take a look at what small business insurance is and how it works.

Next: Part 1: What Is Small Business Insurance?

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The House Insurance Built: Risk Management for Builders & Contractors
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