How Floor Installers Can Reduce Risk With Flooring Contractor Insurance
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Since many flooring contractors work directly inside their client’s homes and businesses, it’s important that they’re protected for liability risks. In addition, they will want to ensure they have coverage for their equipment and tools. The right flooring contractor insurance policy will usually include general liability and commercial property but you may want to buy other types of coverage, as well.
Read below about the different coverages available for flooring contractor insurance.
Do Flooring Contractors Need Insurance?
Flooring contractors and subcontractors need insurance to protect them in case a customer sues them, usually because they allegedly suffered some type of injury, their property was damaged during the installation or for work done improperly. In addition, flooring contractors often use expensive equipment and they’ll want to safeguard their tools from losses such as fire, vandalism and theft.
What Is Flooring Contractor Insurance?
Flooring contractor insurance can refer to a package of commercial coverages tailored to protect businesses that install flooring. However, not all insurance companies sell “flooring contractor insurance” as a single product. Instead, you may need to customize your own policy based on your business’s needs.
What Types of Insurance Does a Flooring Contractor Need?
Many commercial coverages should be considered when you own a flooring business. Below is a detailed list of insurance options you can choose from.
Business Owners Policy (BOP)
A business owners policy (BOP) is a package of several insurance types that combines general liability, commercial property and business interruption coverage (more on these later). A BOP offers a convenient way for flooring contractors to get good base coverage for common work-related risks related to liability and risks to their equipment.
General Liability Insurance
General liability insurance, or commercial liability insurance, can financially protect your flooring contracting business if it is accused of causing injury, property damage or personal injury to a client. If a claim is filed, your policy will compensate you up to its limit.
Examples of covered claims include a client tripping due to improperly installed floor tiles or a lawsuit alleging false advertising by your business.
Commercial Property Insurance
Commercial property insurance pays to repair or replace any equipment or inventory that were stolen or damaged by a covered peril such as fire, explosion, vandalism or windstorm. For example, say you own a small warehouse where you store your tools and vinyl, wood, laminate and tile flooring. If the warehouse catches fire and destroys all of these items, your commercial property policy will help replace what you've lost.
Business Interruption Insurance
Business interruption insurance replaces lost income if a covered peril occurs. For example, suppose the warehouse where your tools and inventory is hit hard in a rainstorm and water starts entering. All of the stored items suffer water damage and because of this, you cannot fulfill the various contracts you've recently secured. In this case, business interruption coverage would help cover the lost income.
In addition, business interruption may cover commercial loan payments and the cost of temporarily relocating your operation if applicable. For floor installers, this would be where any inventory or tools are sold.
Professional Liability Insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance, protects flooring contractors from financial losses resulting from claims of negligence, misrepresentation or inaccurate advice.
For example, say a customer chooses a type of vinyl planks because the flooring contractor recommended them for their resistance to pet-related wear and tear. However, the customer later sued your business because only a few months later, the planks were showing considerable wear and tear from their dog’s claws. This policy would cover legal defense costs if the customer decides to sue the flooring contractor for the inaccurate advice.
Commercial Auto Insurance
Commercial auto insurance provides coverage for vehicles used for business purposes. This can include cars, trucks, vans and other vehicles. Similar to a personal auto policy, commercial insurance will usually include coverage for liability in case you cause a car accident, as well as any other coverages required in your state such as uninsured motorist coverage or personal injury protection.
If you’re financing the motor vehicle, then you may need to buy collision and comprehensive coverage, as well.
Inland Marine Insurance
Inland marine insurance covers movable property, such as equipment, tools and inventory, while it is being transported over land or stored elsewhere. In addition, inland marine insurance can cover items that customers or clients leave with your business, such as flooring from a showroom that will be installed later.
Workers' Compensation Insurance
Workers' Compensation provides benefits to employees who suffer an injury or illness as a result of their work. For example, let's say two of your employees are at your warehouse trying to load granite floor tiling into one of your work vehicles with a forklift for a bathroom remodel. During the process, a stack of tiles falls from the forklift and lands directly on top of one of your employee's feet, breaking it and making him incapable of working until his foot is healed. Workers' compensation insurance would help cover medical treatment and wage replacement for the injured employee.
Employer Liability Insurance
Employer liability insurance covers legal expenses and settlement costs if your business is sued by an employee due to a work-related illness or injury. Going back to the forklift scenario from above, it's possible the employee who broke his foot may sue you because they feel their workers' compensation benefit is inadequate to cover their expenses while they're unable to work. Your employer liability coverage would protect you in this event.
Employer liability insurance can usually be found as part of a workers' compensation package. However, businesses receiving workers' compensation insurance through a state fund such as North Dakota, Ohio, Washington and Wyoming must purchase a separate employer liability policy.
Tools and Equipment Insurance
As the name would suggest, tools and equipment insurance protects tools, equipment and machinery used in your work against theft, vandalism or accidental damage. Equipment protected can include:
- Floor strippers
- Edgers and sanders
- Tile saws
- Wood and laminate cutters
- Tile cutters and scoring wheels
- Hot air welders
- Floor nailers and staplers
So, if your warehouse is broken into and the thief absconds with your National Rogue Heavy Duty Walk-Behind Floor Scraper, your tools and equipment coverage will help cover the cost of replacing the machine.
Also, it's worth noting that your tools and equipment policy may apply to any equipment you borrow from another contractor.
Environmental insurance, also known as pollution liability insurance, covers site cleanup costs, damages to third parties and legal fees if a company is held liable for environmental hazards. During the floor installation, a flooring contractor may use stains, sealants, varnishes and adhesives that are possibly toxic. If a client gets sick either through direct contact or breathing the fumes, you will want this type of policy to cover the subsequent financial and legal fallout.
Commercial Umbrella Insurance
Commercial umbrella insurance increases the limits of your liability policy. For example, say you inadvertently hit your customer's ankle with a hammer while you're installing vinyl flooring. Your general liability coverage has a $500,000 limit, but your customer sues you for $1 million. GLI would pay the first $500,000 and an umbrella policy would cover the remaining $500,000.
How Much Does Flooring Contractor Insurance Cost?
NEXT Insurance’s tile, stone and flooring installer insurance package can cost as little as $41.67 per month. This particular policy will include general liability, workers’ compensation, tools and equipment and commercial property. Of course, prices will vary based on which company you choose.
How To Get Insurance for Your Flooring Business
Here are the steps taken for buying insurance for flooring contractors:
- Determine the types of insurance you need: This may include general liability insurance, workers' compensation insurance, property insurance and commercial auto insurance.
- Find a reputable insurance agent: Specifically, try to find an agent who specializes in small businesses and has experience working with companies in the construction industry. They can help you find the right insurance coverage for your specific needs.
- Get multiple quotes: Companies like SmartFinancial can quickly provide multiple commercial insurance quotes for your flooring business from carriers in your area.
- Review and purchase coverage: If you have changes that need to be made or questions, contact your agent or your insurance company directly.
- Review and update your policy regularly: Your insurance needs may change as your business grows and evolves. You may also be able to get coverage for a lower cost.