Recenly, I received a commercial insurance inquiry regarding what to look out for when starting a new concrete construction business.  The person was a Dallas business owner so I figured someone else might have the same questions as well.   So for those of you who have Dallas commercial insurance questions, I included a copy of my response to his commercial insurance inquiry below.

For more information or to request a commercial insurance quote

Thank you for inquiring about additional insurance information from my agency.  You ask very good questions regarding how to obtain insurance for your concrete construction company.  There are a few things that I should point out when you’re looking for insurance.  Keep in mind the following:

• All companies will ask you for actual or projected gross annual sales.
• The number of W2, 1099, and other employees are taken into account.
• If you use uninsured subcontractors, you will pay for their insurance.
• Most admitted (standard) business insurance providers require 3 years business, industry, or management experience.
• Payment plans and installment plans vary based on the policy type & insurance company.

Generally, as a small business owner in the construction business, you will need to explain the type of concrete construction.  Because concrete construction can vary from business to business, it is important to distinguish whether your business, does sidewalks, driveways, foundations, parking lots, or public roads.  The insurance exposure and rates can vary greatly depending on whether you’re putting re-bar in a sidewalk or laying cable for a post tension engineered foundation.  Your insurance agent will ask you also whether you do any pier work or foundation repair.  So, it is important to breakdown how much of each type of concrete construction your business will perform.

GENERAL LIABILITY INSURANCE

As far as coverage is concerned, when it comes to business insurance, you can almost have it your way.  You are able to build a commercial package policy (a group of policies) over time as your business grows.  When you first start out, in order to get a contract, most general contractors will ask you for a copy of your GENERAL LIABILITY.  This is the foundation for your business.  Most businesses carry a minimum of $1 million of GENERAL LIABILITY coverage.   (A GL policy is a combination of liability coverages designed to protect you against the things for which you can be sued.  These include finished products exposure, libel, slander, and more.  Remember, your general liability only covers your business and its employees.  Coverage for subcontractors has to be included at additional cost.

WORKERS COMPENSATION INSURANCE

As your business grows and you increase the number of W2 employees, WORKERS COMPENSATION will protect you against lawsuits from work related sickness and injuries.  The state of Texas does not require businesses to carry workers comp.  If your employee get injured as a result of working on your job, you and your business could be liable for payment under workers compensation.

COMMERCIAL AUTO INSURANCE

If your business gets to the point where you purchase vehicles and use them in your business, commercial auto insurance can provide your business extra coverage in case you or an employee is driving a company owned vehicle that’s involved in an accident.  Commercial auto insurance policies have the ability to carry liability limits much higher than your standard personal auto insurance policy.  Also, if your business works on some job sites, some job sites require commercial auto insurance with certificate holders before working a job.  This can only be done with a commercial auto insurance policy.

COMMERCIAL PROPERTY INSURANCE

Commercial Property insurance is simple.  If your business rents or owns a building, a commercial property insurance policy provides protection  for the building in case of fire, wind, or any other covered peril.  Business personal property can be added to property policies.  This is your office and the things you use to run your office.  Some businesses do not require this type of coverage.  For those that do not require building coverage, it is possible to get policies that include business personal property only.  Some businesses are unsure of whether they need to get building coverage,  here’s a simple rule:  If it’s in your lease, or if you own it  you should to cover it to the extent of what is require or your potential for catastrophic financial loss.

COMMERCIAL UMBRELLA INSURANCE

After you’ve gotten several million dollars coverage on all your underlying policies, some business often choose to picket up a little extra coverage; just in case.  The commercial umbrella provides coverage  over and above your other policies.  As a result, if your business were exposed to a lawsuit that was above your commercial policies, the umbrella would kick in to add that additional coverage.

As you can see there are a number of different types of commercial policies your concrete construction company can purchase.  The key to choosing the right coverage is only picking the coverages or the policies that your business needs to properly run.  Because commercial insurance allows you to grow your level of coverage as your business grows.