Running a contracting business in New York comes with real risks—from jobsite injuries to property damage and legal claims. Yet many contractors unknowingly make insurance mistakes that leave their business exposed financially and legally.
Whether you’re a general contractor, electrician, plumber, or specialty trades professional, avoiding these common insurance blunders can help protect your livelihood and keep your business compliant. Here are the top five contractors insurance mistakes businesses make—and how to avoid them.
One of the most common mistakes contractors make is purchasing only the minimum insurance required by law or a client contract. While minimum coverage may satisfy basic requirements, it often falls short when a serious claim occurs.
For example, a single lawsuit involving bodily injury or property damage can easily exceed basic policy limits, forcing you to pay out-of-pocket.
Why it matters:Underinsured contractors risk financial strain, lawsuits, and even business closure after a major claim.
Smart solution:Work with an experienced insurance advisor to evaluate your actual risk exposure and ensure your coverage limits match the size and scope of your operations.
In New York State, most contractors are legally required to carry workers’ compensation insurance if they have employees—even part-time or seasonal workers.
Failing to maintain proper coverage can result in:
Construction-related jobs carry a higher risk of injury. Without workers’ compensation insurance, medical bills and lost wages may come directly out of your business assets.
Smart solution:Ensure your workers’ compensation policy is active, accurate, and reflects your current payroll and job classifications.
Many contractors assume general liability insurance covers “everything.” In reality, policies often include exclusions that limit or deny coverage for specific types of work, materials, or activities.
Commonly excluded areas may include:
An uncovered claim can be financially devastating if you discover too late that your policy doesn’t apply.
Smart solution:Review your policy exclusions carefully with your insurance agent to ensure your day-to-day operations are fully protected.
Failing to provide accurate Certificates of Insurance (COIs) or meet contract-specific insurance requirements is another frequent blunder.
This can lead to:
Many property owners, developers, and municipalities require proof of specific insurance limits before allowing work to begin.
Smart solution:Partner with a local insurance agency that understands contractor contracts and can quickly issue compliant COIs when needed.
As your contracting business grows, your insurance needs change. Adding employees, vehicles, equipment, or new services without updating your policy can create dangerous coverage gaps.
Why it matters:Outdated coverage may not reflect your current risk level, leaving you underinsured when claims occur.
Smart solution:Schedule regular insurance reviews to adjust coverage as your business evolves.
Contractors face unique risks that generic insurance solutions don’t always address. Having the right coverage, and the right guidance—helps protect your reputation, finances, and future growth.
A local agency understands New York regulations, jobsite risks, and industry requirements, providing support that goes beyond just issuing a policy.
If you’re a contractor in Mamaroneck or the surrounding New York area, avoiding these insurance blunders starts with expert guidance. Scavone Insurance Agency Center LLC works closely with contractors to build insurance solutions that fit their real-world risks.
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