Contractors

Contractors are the critical element in the construction business, as they contract directly or indirectly for the construction, repair or renovation of buildings, roads or other structures. As with many industries, contractors range from the very small to the very large, and the work performed varies significantly. Contractors are defined in the law by each state and are usually considered those who contract, bid, negotiate a price, supervise, schedule, improve, and demolish.

Insurance Coverage

Contractors require many types of insurance coverage, including:

The exact coverages and limits vary depending upon the exact type of work a contractor is engaged in. Certain coverages for some types of contractors are difficult to place, and can be relatively expensive for the contractor. Errors can vary dramatically depending upon the type of operation and the particular situation.

Capabilities / Target Markets

Preferred Advantage is able to cover all types of small to medium sized contractors in all states, particularly hard to place, unique, and new operations.  For larger risks, visit Preferred Brokerage here.

Classes of contractors include:

Exposure

Examples of types of risk:

Preferred Brokerage has provided proposals to a wide range of contractor accounts specializing in the following areas:

General contractors (GC) typically contract with the project owner or developer, and manage the construction. A GC is usually responsible for supplying all material, labor, equipment, and services necessary for the construction of the project. To do this, the GC may contract with one or more subcontractors to provide services on parts of the project.

Some owners may also serve as a general contractor for renovations to property they own, although they will be the GC on paper only. We have specialty markets that will provide the liability coverage they need for this structure.

Artisan contractors are the largest class of contractors, and are composed of mostly small, highly skilled specialty contractors. Artisan contractors represent almost two out of three wage and salary jobs in the U.S. construction sector, primarily plumbing, electrical, and masonry contractors. Most of the artisan/trade contractor companies tend to be small, with the majority generally employing fewer than 10 workers.

Artisan contractors enter into agreements as sub-contractors with general contractors that specify the types of insurance coverage, limits and special endorsements the sub-contractors must carry. In addition, the contracts typically contain indemnification provisions which can transfer the obligation to pay for damage or errors from one party to another.

Residential contractors are general contractors whose specialization is building residences such as houses, apartments and condominiums. They coordinate and supervise the work at construction sites from beginning to end. They usually work independently or have their own companies but may also be employed by property owners and developers. Small to midsize construction practices face a unique set of challenges within the market. In attempting to stay competitive by adding or switching specialties, they run the risk of increased exposure. For example, a roofing contractor that has previous claims against the company may supplement their title with “general contractor” in order to remain competitive, thereby increasing their exposure.

The construction business is made up of many different types of contractors of all different sizes. Many factors impact the price and terms of coverage provided. Not only do the type of contractor and its size impact pricing and terms, the jurisdiction the contractor operates in also has an impact. Underwriters will want to know exactly what a contractor is doing, where the services are performed and how much revenue (or payroll) it generates. In addition, for certain types of contractors (such as roofers) underwriters will want to know specifically what types of services the contractor is performing.