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Avoiding the Top Insurance Mistakes Construction Contractors Make

by | Feb 11, 2022

We’ve enjoyed working with construction contractors from nearly every discipline for over two decades. This includes painters, drywallers, framers, flooring, cabinets, flatwork, foundation work, generals, handymen, etc. Through all of this, we’ve noticed some common insurance mistakes that can hurt their chances for success. Here they are:

Facing the Reality of Risk

Bad things happen, and construction has one of the highest injury and fatality rates among all industries. You can get sued, stuff can get stolen, you might accidentally damage property, or an employee might get hurt or killed. Understand that while you can do a lot to prevent disaster, there’s always a chance for bad things to happen. Adequate insurance coverage can help you avoid financial losses that can sink your business.

Focus on Coverage, Not Just Policies

Don’t just buy the policy type someone tells you to get. It’s the coverage inside a policy that matters most. According to The Hartford, 40% of small businesses will likely experience a property or general liability claim in the next ten years. Ensure you have the right coverage and limits for your specific needs.

Put Your Business Owner Hat on First

With 50% of small businesses failing within the first five years, it’s crucial to prioritize your business’s health. One big mistake and you can lose it all. Insurance can help protect you against many of the biggest risks you face as a business owner.

Don’t Just Meet Requirements; Protect Yourself

Different entities, like the government, clients, and banks, may require insurance from you. However, meeting these requirements doesn’t necessarily mean you’re adequately protected. The average cost of a customer injury claim is around $30,000. Don’t make the mistake of being underinsured; protect your business with more than just the minimum required coverage.

Know Your Optional Coverages

Insurance can be complicated, but it allows for personalization. 75% of small businesses are underinsured by at least 40%. When shopping for insurance, ask questions and learn about optional coverages or limits that can better protect your business.

No Comprehensive Insurance Plan

Having an insurance professional who can look at your entire account, both personal and commercial policies, can help you identify serious gaps in coverage and save money.

Stay on Top of Changes

Keep your insurance up-to-date and communicate any changes to your insurer. Review your policies at least once a year to identify gaps in coverage and find ways to improve your insurance plan.

Find the Right Help

Successful contractors build a team around them, including someone competent and caring to help with insurance. We have experts waiting to help you navigate your choices. 


Ben Page, a Business Development specialist with over 20 years in the insurance industry, is an expert in Property & Casualty, Life, Health, and Disability insurance. Ben is licensed in all 50 states and dedicated to empowering clients with insider knowledge and making insurance more accessible. Passionate about client-centric service, he has helped build several successful insurance agencies. Ben enjoys Jeeps, Rock and Roll, cheese, movies, and spending time with his wife, three kids, and their golden doodle when not working.