Project insurance applies to contractors and handypersons. Project policies are typically short-term and, as the name implies, apply to a specific project. Follow along as we cover the various types of project insurance, define project-based insurance, and explain who needs it.

What is project liability insurance?

Project insurance is the overarching term for many different policies designed for handymen and contractors and can encompass several forms of insurance. However, each one is a short-term, project-specific insurance policy that extends from the start of the work to the date of completion. The insurance policy can cover you for just a few hours (like for a quick installation project) or longer for more extensive renovation and construction projects.

So, if you get hired to refloor a bedroom one month but don’t have another job until a garage repair comes along the next month, you might consider two different project policies. You’ll ensure that you have coverage for each job, but not buy insurance for the times you’re not working (which will save you money.)

Project-specific liability insurance doesn’t delve into the specific details of each particular job, meaning it wouldn’t typically differentiate between reflooring and garage repair. However, it does protect you from common claims such as third-party property damage and third-party bodily injury.

Before diving into the specific policies and types of coverage you can choose from, first ensure that project-based insurance is right for you.

Who needs project insurance?

Both established small businesses and self-employed independent workers need protection from the inherent risks of general contractor and handyman work. Hanydpersons and contractors perform almost every task under the sun (and under the roof); thus, they frequently use project-specific construction insurance.

Consider a handyperson who is just starting out in their new venture. They may have decided to start their own business after years of being the “go-to neighbor” when someone needed remodeling, repairs or reconstruction work. Insurance might be the last thing on their mind, but without it, they’re vulnerable to a toolbox full of potential trouble.

As soon as you start accepting payment for handyman or contractor services, you’re a business — and small businesses are subject to being sued, or threatened with a lawsuit. Insurance can be costly, especially when starting your business with just a few recurring clients, or not enough new clients to warrant a year-round insurance policy. Newly established handymen and contractor operations might work only a few times per month. In this case, short-term project insurance can be invaluable for helping stabilize your finances.

Alternatively, project insurance can also be helpful to established contractors who have a unique project requiring coverage that their existing insurance does not provide. As you gain more experience, you get hired for larger and longer-lasting projects that tap into your deep well of knowledge and expertise, and some of those projects may warrant project-based insurance..

Different types of project-based insurance coverage

Some insurers will include project-based insurance under their existing policies within a defined range of exposures. For example, you might find one of these policies including project insurance:

General liability insurance – A general liability insurance policy (or CGL policy) is the most fundamental type of insurance any business owner wants in their arsenal. Why? General liability insurance protects you and your business against the financial impact of claims of third-party bodily injury, third-party property damage, and personal and advertising injury.

Contractors’ all risks (CAR) insurance – CAR insurance (not to be confused with car insurance) protects contractors against the impact of claims of third-property property damage, third-party injuries, and delays in start-up costs.

Multiple parties can jointly purchase a CAR insurance policy with options including the contractor, sub-contractor and even a finance company being listed as Named Insureds. Each party retains the right to place a claim against the insurer but they can not subrogate against each other.

CAR insurance covers unforeseen and unintended damage including:

  • Fire
  • Earthquakes and wind damage
  • Flood and water damage
  • Construction defects and negligent work
  • Mold

On the other hand, CAR insurance will not cover:

  • Normal wear-and-tear after the project is complete
  • Damage from poor workmanship
  • Willful negligence (not taking proper care when performing tasks)

Since coverage can vary, always read your insurance policy carefully.

Profession-specific insurance – Profession-specific policies are perfect for those who work with their hands. Whether you’re a handyman, a general contractor, a carpenter, or someone who focuses on flooring, profession-specific policies can act as project insurance.

The key to success with project-based exposures is to find an insurance policy that covers you while working on a project — yet doesn’t drain your bank account.

How to get short-term, flexible insurance

We think project insurance should be flexible enough to cover you only when you need it. Our contractor insurance policies provide flexible insurance coverage by the job, month, or year.

With Thimble, you can easily add crew and Additional Insureds to your policy. Thimble helps those who work on a project-by-project basis get the coverage they need. You can rest assured that you pay for insurance only when you’re working. Get a quote today for insurance that works as hard as you do.

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