Restoration services companies are exposed to many risks in their work. Whether it’s water damage restoration, fire restoration, mold remediation, or another specialized service, your job involves unpredictable environments and high stakes. Protecting your business means not only providing quality work, but also making sure you have the right insurance coverage to protect your livelihood.
In this article, we’ll discuss the main types of insurance for restoration companies, explaining why each type is important and how it can protect your business from costly claims or lawsuits.
1. General Liability Insurance
General liability insurance is the cornerstone of any business insurance program. It covers third-party claims for bodily injury, property damage, and advertising damages. For renovators, this could mean coverage for incidents like a client slipping on a wet floor that you were supposed to mop or accidentally damaging a client’s property during a renovation project.
Without general liability insurance, even a minor accident can result in a lawsuit that could ruin your business. Most clients and contracts require you to purchase this insurance coverage before you begin work, making it an important investment.
2. Professional Liability Insurance
Professional liability insurance, also known as errors and omissions (E&O) insurance, covers claims related to errors or omissions in your professional services.
For example, if you misdiagnose a mold problem or fail to restore a property to an acceptable condition, a client could claim that your negligence caused further damage or loss. With professional liability insurance, you are protected against such claims, which can often result in significant legal costs.
3. Workers’ Compensation Insurance
If you have employees, disability insurance is not only a good idea but often required by law. This coverage includes medical benefits, wages, and rehabilitation for employees who are injured on the job.
Restoration services can be dangerous because workers often work in structurally unstable environments and are exposed to hazardous substances or heavy equipment. Workers’ compensation insurance not only ensures that your team is covered in the event of an injury, but also protects your business from potential lawsuits related to workplace injuries.
4. Commercial Property Insurance
Your restoration services business probably relies on a variety of valuable tools, equipment, and office space. Commercial property insurance covers damage to your business’s property caused by events such as fire, theft, or natural disasters.
For remediation contractors, this may mean purchasing insurance for your dehumidifiers, air washers, and other specialized equipment necessary for your work. Replacing these items out of pocket can be prohibitively expensive, but with the right insurance coverage, you can get back to work quickly after a loss.
5. Inland Marine Insurance
Standard commercial property insurance policies typically do not cover tools and equipment when they are being transported or used off-site. Inland Marine Cargo Insurance bridges this gap and protects your equipment wherever it is being transported.
Imagine a scenario where your team’s tools are stolen from a construction site or damaged in transit. Inland Marine Insurance ensures that these items are covered, helping your business avoid costly downtime.
6. Commercial Auto Insurance
Whether you have a fleet of branded vehicles or a single company car, commercial auto insurance is essential. Work-related accidents are often not covered by private auto insurance, leaving you exposed to significant risks.
Commercial auto insurance covers damage and liability related to the vehicles used for your business. Additionally, it generally offers higher coverage amounts than private insurance, ensuring that your business is adequately protected.
7. Environmental Pollution Insurance
Remediation companies often deal with hazardous substances such as asbestos, mold, or contaminated water. Environmental liability insurance covers claims related to environmental damage or health risks caused by your work. For example, if mold spores are accidentally spread during renovation work and this leads to health problems for the building’s occupants, this policy provides coverage for such claims. Given the increased attention to environmental safety, pollution liability insurance is becoming increasingly important for remediation professionals.
8. Cyber Liability Insurance
Although it may not seem directly related to your job, cyber liability insurance is becoming increasingly important for restoration services companies. If you store customer data, accept online payments, or use project management software, your business is at risk of a cyberattack.
Cyber liability insurance protects against the financial consequences of data breaches, ransomware attacks, and other cyber threats, and covers costs such as reporting fees, legal fees, and dealing with reputational damage.
9. Liability Insurance
Additional liability insurance provides additional protection beyond the coverage limits of your existing policies. This can be particularly beneficial for restoration services businesses, as the costs of claims and lawsuits can quickly exceed the standard amount of insurance.
For example, if a general liability claim exceeds the coverage limit of your policy, additional liability insurance can cover the difference, ensuring that your business is not at risk.
Protect your business for the long term
As a restoration contractor, your work is essential in helping clients recover from disasters. However, this exposes you to specific risks that require comprehensive insurance coverage. By investing in the right policies, you can focus on your work with peace of mind, knowing that your business is protected against unexpected events.
Review your insurance coverage regularly with an experienced insurance advisor to ensure it keeps pace with your business’s growth and changing needs. With the right protection, you’re ready to take on any challenge that comes your way.