Business Insurance for Contractors: A Buying Checklist

Create a one-page business description that a person unfamiliar with your company could understand. Include:

• Work performed: List each trade and describe unusual tasks, including heights, hot work, excavation, demolition, and design services when applicable.
• Customers and projects: Identify residential or commercial work, new construction or renovation, and whether buildings remain occupied.
• Where you operate: Include your business address, states where crews work, and any planned expansion.
• People doing the work: Separate owners, employees, temporary workers, and subcontractors. Record duties rather than assigning insurance class codes yourself.
• Equipment and vehicles: List what you own, rent, lease, or borrow, where it is stored, and how it moves between jobs.
• Business history: Gather current policies, requested claims history, estimated revenue, payroll, and subcontractor payments. Mark estimates clearly.

Send the same description to each agent or insurer you approach. Correct an incomplete description before choosing a proposal, even if the simpler description produces a lower price.

Use the following as a discussion agenda. A policy name alone does not answer whether your particular operations are included.

General liability and completed work

Ask whether the proposal includes the activities you listed and what limits apply to ongoing work and products-completed operations. Also ask how exclusions for damage to your work, residential construction, roofing, subcontracted work, or particular project types affect your business.

General liability is not a guarantee that defective work will be repaired. The Texas Department of Insurance explains that damage-to-your-work exclusions can distinguish damage to a contractor's own work from resulting damage to other property. The policy and endorsements control the result. Our general liability guide explains the coverage category.

If you stop a trade, finish a project, retire, or change insurers, ask specifically about claims involving previously completed work. Do not assume coverage lasts for a fixed number of years merely because you carried insurance while the job was underway.

Workers' compensation and employee injuries

Before hiring or accepting an out-of-state job, verify the applicable rules, including how owners, employees, and subcontractors are treated. The U.S. Department of Labor's directory links to state workers' compensation agencies; the relevant agency and your insurance professional are starting points for this check.

Bring payroll estimates by actual duty and work location. Ask who is included, how payroll records should be maintained, and what information an audit may require. Read the workers' compensation overview to prepare your questions.

Vehicles, tools, and property

Describe every business use of a vehicle, including employees driving their own cars, hired vehicles, and trailers. Ask which vehicle and driver schedules are required and whether hired or non-owned liability is included. Use the commercial auto guide for terminology to discuss with your agent.

For tools and equipment, check theft, transit, off-site storage, rented items, deductibles, and individual-item limits. Contractors' equipment insurance is a distinct discussion: Travelers describes its inland marine equipment product as addressing equipment used at jobsites, in transit, and during storage. That product description does not establish what another insurer's form covers. Our contractor tools inventory shows how to record ownership, values and storage before that conversation.

Project and specialist coverage

Ask who is responsible for insuring the building under construction and materials awaiting installation. Request written clarification of the project policy's insured parties, covered property, dates, deductibles, and exclusions.

If you perform design work, handle pollutants, or sign contracts requesting excess limits, put those facts on your agenda. Ask which separate policies or endorsements address them and which risks remain uninsured. Avoid assuming that adding an umbrella fixes every exclusion in an underlying policy.

Send the complete insurance exhibit and any related indemnity language to your insurance professional before agreeing that your coverage complies. Use legal counsel for contract interpretation. Keep a written list of the customer's requested coverage types, limits, endorsements, insured names, and delivery dates.

A certificate of insurance summarizes information; changing the certificate does not change the policy. For Texas risks, TDI's certificate guidance explains that a certificate cannot create rights beyond the policy and its endorsements. Use our certificate of insurance checklist to compare the documents.

Ask your agent:

• Is the customer's exact legal entity included as requested, and where is that shown?
• Does any additional insured provision apply to ongoing work, completed work, or both?
• Are primary and noncontributory wording or a waiver of subrogation requested, and what documents address them?
• Are there requirements the insurer cannot meet, extra charges, or information still needed?
• What cancellation notice, if any, does the policy or applicable law actually provide?

Obtain corrected documents from the authorized issuer. Do not edit a certificate or endorse a promise of coverage yourself. The COI & Contract Insurance Checklist can turn a client's insurance exhibit into a list of questions. If a client has already rejected a certificate, see our COI rejection triage table; to track subcontractors' certificates, see our subcontractor COI tracking system.

An insurance exhibit may request additional insured status, a waiver of subrogation, and primary and noncontributory wording. They address different questions; checking one box does not establish the others.

Ask for the applicable documents and a written explanation. For Texas risks, TDI's certificate FAQ distinguishes what can be stated about blanket endorsements from what the underlying policy actually grants. Do not treat a certificate-holder name as proof that all three requests have been satisfied.

Hypothetical job file: A contractor will install cabinets at a customer's property. The customer's exhibit mentions completed work, while the first document supplied addresses ongoing operations. Record the mismatch and ask the issuer to explain whether another form is needed, available, or outside the proposal. Do this before telling the customer the requirement is met.

A useful renewal discussion starts with the jobs you accepted. Compare the prior application with your current work: subcontracting, work at height, design responsibility, demolition, occupied buildings, off-site storage, and travel to new jurisdictions. These are prompts for an accurate work description, not assumptions that each activity is covered or excluded.

Keep a short change record with four columns: activity, first date performed, documents supplied to the agent, and written response. If a customer asks for a new endorsement, attach the contract request and the issued document to the same record. This helps separate something you requested from something actually issued.

For equipment, list who owns it, where it travels, where it is stored, and how replacement values were prepared. Travelers' contractors-equipment product description includes jobsites, transit and storage as relevant settings; another form may have different terms. Ask specifically about rented equipment and responsibility under the rental agreement.

If a bid requires a bond, record its type, amount, obligee, and submission deadline separately from the insurance checklist. The SBA distinguishes bid, payment, and performance bonds: they address different contractual commitments. A requested bond is not interchangeable with a liability policy or a certificate.

Ask the surety professional what financial documents, experience, and indemnity commitments are needed. Review the actual terms rather than assuming a bond claim works like a claim under your business insurance.

For each subcontractor, keep the signed agreement, work description, certificate, any requested endorsements, issuer contact, and policy expiration dates. Ask your own agent how uninsured subcontractors or missing records could affect your coverage or an audit. A certificate from last year's project may not describe this year's coverage.

Before renewal, compare the business you insured with the business you now operate. Have you added employees, different trades, larger projects, new states, equipment, or vehicles? Give your agent those changes and upcoming contract requirements early enough to resolve open questions.

For each proposal, record the total quoted cost, payment fees, deposit, deductible or retention, audit basis, exclusions, and outstanding conditions. Ask which figures are estimates and what could change the final premium. Keep the written answers with the proposal so you can compare the same work and requirements across options.

The most useful outcome is a clear work description and a short list of unanswered questions. Start with the business insurance quiz to organize coverage topics, then bring the results and your job documents to a licensed insurance professional. Quiz results are educational starting points, not a legal requirements determination or confirmation of coverage.