When working as a construction contractor, money often becomes tight. While looking for ways to cut costs, do not even consider dropping any component of your comprehensive contractor's insurance package. Your insurance is necessary and may even help produce more income. Here are a few reasons to ensure your insurance policies are paid and in full force.

1. Protects Your Personal Assets

The world is increasingly becoming a more litigious society. People now look for reasons to take others to court. Unfortunately, when you provide products and services, your business can quickly become a target of a lawsuit. Some targets include:

• Third-party injuries
• Property damage
• Equipment malfunctions
• False advertising

These are just a few. There are many others.

The general liability coverage included in your contractor's insurance helps pay for your legal fees and any damages or settlements resulting from a related lawsuit. Without liability coverage, these expenses would have to come from your business coffers or out of your pocket. 

2. Provides Employee Protection

Most states require the purchase of workers' compensation insurance for companies to do business legally. This insurance protects your employees if they are injured or get sick from work-related causes. Most policies include short-term and long-term disability benefits, missing wages, and death benefits. 

Rules and regulations vary from state to state regarding coverage requirements. For example, some states allow sole proprietors to opt out, while others do not. Penalties for non-compliance can be quite high, as well as lawsuits from employees injured on the job.

As a contractor, employee protection is crucial. Not only will workers' compensation insurance protect your employees, but it will also protect your business from these expenses. 

3. Attracts business

People want to do business with insured companies. Stipulations for bidding on contracts often include the required insurance. Even homeowners will often ask to see proof of your insurance. Having the proper insurance to perform the contract can ensure you are a contender for the job.

Being insured lets your clients know that you can make it right if anything happens on the job site. The last thing a client wants is to be tied up in court for years to come over something an insurance policy should have covered. 

Ensure you are adequately insured by talking to your insurance agent about appropriate contractor insurance for you and your business. Policies vary depending on the sector you work in, the number of employees you have, and the type of work you perform. 

Contact an insurance agent for more information about contractor insurance.