Getting into the roofing contracting business means taking on risk with every job. From potential injuries on the worksite to property damage during repairs, unexpected costs could put your company under if not properly protected. That’s why it’s vital for roofing contractors to understand their insurance options.
Understanding Types of Required Insurance
Before diving into specific policies, it’s helpful to overview the three main categories of insurance that every roofing contractor will need:
General Liability Insurance
As a contractor, you’re liable for injuries or damages that occur as a result of your work or operations. General liability insurance provides protection if a customer, employee, or member of the public is hurt on your worksite or their property is damaged. It pays legal fees and settlement costs on your behalf.
Minimum coverage limits vary by state but are often at least $1 million per occurrence and $2 million in total claims. Umbrella policies can provide additional liability protection above your standard limits. Make sure hazardous operations like roofing are clearly specified.
Workers’ Compensation Insurance
If an employee undergoes a work-related injury or illness, workers’ comp pays their medical bills and lost wages. It also protects you from lawsuits over on-the-job incidents. All states require this coverage for businesses with employees.
Self-employed sole proprietors can opt out of workers’ comp in some areas but still need personal injury protection, typically through an occupational accident policy. Make sure any subcontractors carry their own workers’ comp, too, to avoid liability for their employees.
Commercial Auto Insurance
Any vehicles used for your roofing business—whether owned, leased, or hired—require commercial auto coverage. This includes trucks, trailers, and employee vehicles used partially or entirely for company purposes.
In addition to bodily injury and property damage coverage, you may need non-owned auto liability protection. This extends your auto coverage to vehicles not owned by your company that employees drive for work purposes, like when loaning a van to a subcontractor.
Key Coverage Options for Roofing Contractors
In addition to the bare minimum requirements, wise roofing contractors obtain additional specialized policies to comprehensively protect their livelihood and liability. Here are five coverage options to strongly consider:
Commercial Property Insurance
Protect buildings, equipment, tools, materials, and client properties in your care, custody, or control from risks like fire, wind damage, hail, and more. Most standard property policies exclude roofing work, so talk to your agent about appropriate endorsements.
Without this, you’d be responsible for repair or replacement costs from accidents. Coverage also applies if your truck rolls over tools on the way to a job or they’re stolen from an unattended work vehicle.
Professional Liability (Errors & Omissions) Insurance
Helps defend against claims over poor work quality, failed inspections, damage from improper installation techniques, incorrect estimates, and contractual breaches. Unlike general liability, it pertains specifically to issues arising from your work product or advice.
Roofing demands precision, so professional liability guards against unintended mistakes. It also covers legal costs to address complaints from regulatory bodies or building departments.
Installation Floater Insurance
Like an inland marine policy, this insures materials and supplies in transit or being installed. It provides first-party coverage in case roofing products are damaged or stolen before, during, or right after installation. Valuable stock deserves protection between delivery and final completion.
Equipment Breakdown Coverage
Attach this endorsement to your property policy to safeguard equipment from sudden breakdowns or mechanical/electrical failures. Booms, lifts, trucks, generators, and tools are vulnerable, and their repair or replacement costs can cripple a small business. This helps keep operations running smoothly.
Surety/Performance Bonds
Required by many commercial jobs and public works projects, surety bonds guarantee satisfactory completion of contracted work. If you fail to perform, the surety company steps in to fund substitute contractors to finish the job per your agreement. Bonds instill trust and qualify you for larger contracts.
Additional Tips for Roofing Contractors’ Insurance Plans
Consider these extra factors when choosing and maintaining your insurance portfolio:
- Shop multiple carriers annually and request proposals itemizing all fees, discounts, and coverage details in writing. Compare apples-to-apples.
- Build a strong safety program to qualify for experience rating discounts. Train all workers on safety protocols to reduce risks and future premium increases.
- Inflation clauses automatically adjust property policy limits annually to keep pace with rising replacement costs. Without them, you may find coverage doesn’t fully cover a total loss.
- Ensure subcontractors carry adequate insurance, naming you as an additional insured. Request certificates from all subs.
- Work with an experienced agent who understands your industry exposures. Choose one willing to act as an advocate and help you optimize protection.
- Maintain high liability limits. As your company grows, assets increase, and so do risks and potential legal settlements.
- Carry adequate uninsured/underinsured motorist bodily injury coverage in case an at-fault driver lacks sufficient liability limits to fully compensate for injuries.
- Inspect and maintain all vehicles/equipment per manufacturers’ instructions. Well-cared-for assets are less likely to need replacement due to mechanical breakdown or failure.
With the right mix of mandatory policies and optional endorsements from reputable insurers, you can shield your roofing business from unpredictable risks that might otherwise put it in jeopardy. Your livelihood depends on being properly protected every step of the way.
FAQs About Insurance for Roofing Contractors
Here are answers to some of the most common questions:
What factors influence contractor insurance rates?
Primary factors insurers consider are your company’s safety record, claims history, experience level, amount of subcontracted work, size and nature of operations, and compliance with estimates/deadlines. Safer contractors generally pay less over time as their risk level decreases.
How often should policies be reviewed?
At a minimum, review your full insurance portfolio annually at renewal time to ensure proper coverage and pricing. Market conditions change, so you may qualify for better options. Also, reassess periodically or whenever your operations, vehicles/equipment, property, or clientele change significantly.
Can contractors get umbrella liability insurance?
Yes, umbrella policies provide liability protection above your standard general liability and auto limits, usually in $1 million increments up to $5-10 million. They notably increase coverage while only costing a small percentage more. High-risk operations like roofing often buy additional umbrella limits.
What if a claim is denied?
Read your contracts carefully to understand denial circumstances. You may appeal or seek legal help if coverage was reasonably expected. However, exclusions for negligence or intentional noncompliance with safety protocols are typically enforceable. The key is risk prevention through proper training, documentation, and operating procedures.
How long do general liability policies typically last?
Most contractors purchase a one-year term, though three-year policies are sometimes available for small premium savings. Renewing annually gives the flexibility to adjust coverages based on that year’s operations and negotiate competitive rates. It also prevents being locked into an unresponsive insurer long-term if service declines.
What are the penalties for operating without required insurance?
State licensing boards can revoke contractor licenses for noncompliance, and municipalities may refuse to issue permits. You also risk steep fines and legal jeopardy if uninsured losses occur. No amount of savings is worth the potential business disruption and liability. Maintaining active policies demonstrates responsibility to clients and protects your livelihood.
With the right protection and risk mitigation strategies in place, you can focus fully on your trade’s craftsmanship without undue concerns over unpredictable costs or incidents threatening your bottom line. Prioritizing safety, continuous education, prudent plan selection, and diligent career review help make you an exemplary roofing professional equipped for sustained growth.