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Understanding Illinois Contractor Insurance Essentials
Do you need contractor insurance in Illinois? What happens if an electrical contractor overloads a circuit and causes a house fire?
Who pays for the repairs if they don’t have adequate liability insurance in place?
Imagine a framing contractor’s truck strikes a minivan while delivering supplies.
Does their personal auto insurance cover the commercial vehicle?
What if a customer sues for shoddy ceramic tile installation that allows water intrusion issues? Who pays massive legal fees and settlements without contractors insurance?
Unless insured, a contractor has to pay massively out-of-pocket. On the other hand, the right business insurance coverage transfers such risks to insurers instead.
This allows construction company owners to stop worrying and focus on daily field operations with confidence.
Every savvy building contractor partners with an independent insurance agent to safeguard their assets and comply with state laws.
Looking for a quote?
Get it now!
Why Illinois Contractors Insurance Matters?
Make no mistake – operating without adequate insurance as an Illinois contractor or builder opens you up to massive financial risk capable of totaling your business.
Going without proper insurance also hampers contractors. This results in:
- Inability to bid on many commercial jobs lacking insurance certificates
- Failure to comply with state licensing insurance minimum
- Loss of access to qualified subcontractors who demand protection
- Putting business assets at risk lacking coverage for offices, warehouses, and job sites
Don’t jeopardize your company’s future over insufficient insurance!
The licensed Illinois agents at The Allen Thomas Group simplify gaining comprehensive, affordable construction insurance.
Table of Contents
Types of Business Insurance in Illinois for General Contractors
General Liability Coverage
The most essential coverage for any small business owner is a general liability policy. This insurance can protect contractors against costly third-party bodily injury and property damage.
Illinois general liability insurance can help cover legal fees plus damages awarded from situations like:
- A framing subcontractor’s stray roofing nail piercing underground gas lines.
- An HVAC technician accidentally cut power to an entire office floor on a wiring job.
- A customer slipped on ice outside a contractor’s warehouse and suffered injuries.
An independent insurance agent can help tailor general liability insurance in Illinois to fit your unique business model and exposure.
Commercial Property Insurance
This Illinois business insurance policy protects contractor business properties like offices, warehouses, storage yards, and showrooms from covered losses, including fire, vandalism, theft, and storm damage.
This insurance protects larger contractors with significant real estate assets.
It can be expanded using an endorsement called “Business Income” insurance that pays lost profits if properties become unusable due to property damage.
Builders Risk Insurance
For contractors engaged in construction projects, builder’s risk insurance can provide coverage against damage to structures while being constructed and theft of materials during this period.
Commercial Auto Insurance
Construction companies owning one or more vehicles registered commercially need commercial auto insurance in Illinois.
It works similarly to personal auto coverage but offers higher liability limits following cars and trucks used for business regardless of who is driving them.
Key reasons general contractors in Illinois secure commercial auto policies:
- At-fault accidents involving company pickup trucks traveling between jobs
- Employee vehicle collisions during supply delivery run
- Overnight theft of work vans loaded with thousands of tools
In addition to these significant coverages, Illinois general contractors also obtain specialty insurance options.
This type of insurance provides protection for everything fueling your company’s livelihood from the many threats in the construction realm. Insurance helps safeguard your assets.
Workers Compensation Insurance
All general contractor businesses with employees are required to carry workers’ compensation, including part-time staff, per Illinois law.
This critical Illinois business coverage pays lost wages, hefty medical bills, and long-term support costs if employees sustain injuries on the job:
- A roofer falling from faulty scaffolding on a job site
- An electrician suffering electrical burns rewiring a factory
- Back injuries from repeated heavy lifting reported by crew members
Skirting mandatory Illinois workers compensation laws leaves business owners liable while failing vulnerable employees when accidents inevitably occur. Business owner’s insurance is critical to protect your business.
Tools and Equipment Insurance
This inland marine insurance policy covers expensive contractor equipment and tools used on job sites or daily operations against common risks like theft, collisions, flood, and other weather damage.
It is especially useful for HVAC, plumbing, and electrical contractors investing in costly gear to deliver specialized trade services.
It often includes an appraisal of equipment values and no depreciation or deductible in the event of total losses.
Errors and Omissions Insurance
This is crucial for different types of independent contractors who work in different professions, such as architects, engineers, sustainability consultants, and some general contractors involved in design-build projects.
This insurance is essential in Illinois for contractors that protect against pricey liability claims alleging costly errors, omissions, or negligence in contractually obligated professional services.
As more construction firms offer in-house design, E&O protection helps safeguard this emerging liability exposure area unique to the building trades.
Comparing General Contractor Insurance in Illinois
Skimping on liability limits or raising deductibles to save money on premiums can backfire massively if claims later exceed caps.
That’s why The Allen Thomas Group urges setting limits based on factors like:
- Average project size – Larger builds may justify higher liability limits.
- Number of subs – More contractors equals more exposure.
- Past losses – Previous claims could support increased limits.
- Equipment values – Insure machinery, tools, and vehicles are at full replacement cost.
- Gross revenues – Income growth over time warrants rising limits.
- Total assets – Added buildings or warehouses may necessitate boosting property insurance limits.
Properly insuring heavy equipment, project works in progress, and other elements vital to construction businesses at accurate values ensures being made whole again after a loss.
Understanding Exclusions & Gaps
In addition to adequate limits, Illinois contractors must review policies for subtle exclusions that leave them exposed.
Examples include:
– Gradual concrete or foundation settling damage is often excluded under CGL policies.
– Most policies won’t cover faulty workmanship without added products/completed operations coverage.
– Standard workers’ compensation insurance excludes company owners and officers who need separate policies.
– Equipment coverage often excludes normal wear and tear and mechanical breakdown.
Read the fine print, ask questions, and work with an independent agent to plug gaps!
The bottom line?
Work with the insurance experts at The Allen Thomas Group to ensure you’ve got the coverage your company requires to tackle big and small projects with confidence.
Illinois Insurance Requirements for Contractors
To legally operate, Illinois building contractors must carry specific minimum types and levels of insurance. This includes:
General Liability Insurance Policy
– $500,000 minimum per occurrence
– $1 million aggregate policy limits
Workers’ Compensation
Illinois requires workers comp for all employees.
Auto Insurance
– Legally required minimums when registering vehicles commercially
In addition, contractor licensing bonds and exams are mandatory for some businesses in Illinois.
Failing to meet insurance rules and carry proof of coverage can open contractors to heavy fines or inability to perform work.
The Allen Thomas Group demystifies regulations across Illinois! Our agents explain legal rules in plain terms while securing necessary coverage so you can confidently run daily field operations.
Insurance Solutions Customized For You Contractors
Yes, Getting A Certificate Of Insurance Is Really That Easy
We know how frustrating and complex the process of finding the right insurance can be and how it slow down your ability to take care of your customers especially when you are waiting for bonds or a Certificate of Insurance (COI).
Let us help fix it for you.
Tell us about your specific needs and we will find the right policy for you.
Review the results of our search.
We will walk you through your new policy step by step.
We’ve helped thousands of Illinois Businesses Just Like You
Our Carrier Partners
That allows us to find the best rates for your construction business
Why Contractors in Illinois Choose The Allen Thomas Group
Sifting through the wide range of contractor insurance options can prove extremely challenging.
For 25+ years, The Allen Thomas Group has worked closely with general contractors, subcontractors, home builders, and construction trades across Illinois to provide tailored insurance solutions protecting their assets and livelihoods.
Our agents thoroughly comprehend state compliance rules, bidding risk transfer requirements, and the unique exposures faced by running contracting businesses in the Land of Lincoln.
The Allen Thomas Group also maintains strong relationships with highest-rated construction insurance carriers to provide you with the appropriate insurance cover in Illinois.
This enables us to match contractors with ideal policies featuring robust, specialized protection at competitive rates. We put our buying clout to work, negotiating discounts only available via independent channels.
Illinois contractors can be confident in The Allen Thomas Group’s industry expertise, guiding them to customized commercial insurance packages meeting their risk profiles and budgets.
We offer general liability insurance and all forms of coverages needed by your business to stay afloat in trying circumstances.
The Allen Thomas Group caters to your insurance needs and is happy to provide a certificate of insurance as proof so your customers can confidently do business with you.
Apply for an insurance quote today!
Contractors Liability FAQs
Get More Insights On Making The Right Insurance Decision For Your Company
What insurance coverage you need as a contractor in Illinois?
Mandatory:
- Workers’ compensation insurance
- Contractors general liability insurance
Recommended, but not mandatory:
- Commercial auto insurance
- Builder’s risk insurance
- Professional liability insurance
- Business interruption insurance
What is Illinois minimum insurance?
The “minimum insurance” refers to the recommended general liability insurance coverage for Illinois contractors.
This is $1 million per occurrence and $2 million aggregate for bodily injury and property damage.
However, higher limits may be required by clients or project specifications.
What is full coverage insurance in Illinois?
Full contractor insurance coverage isn’t defined, but a comprehensive package for contractors typically includes:
- General liability coverage with adequate limits
- Workers’ comp insurance
- Commercial auto insurance
- Builder’s risk insurance (for large or high-risk projects)
- Professional liability insurance
Consider additional common insurance options like business interruption, commercial umbrella insurance, and cyber liability insurance.
What is the cost of business insurance in the state of Illinois?
The insurance cost in Illinois varies based on a range of factors, such as business type, size, experience, coverage chosen, and deductibles.
Expect to pay hundreds to thousands of dollars per year for basic coverage, with significant increases for additional coverage and higher limits.
What does the Illinois Workers' Compensation Commission do?
The commission resolves disputes between employees and employers about work-related injuries.
What states do you provide contractor insurance in?
- Alabama
- Arizona
- California
- Colorado
- Connecticut
- Georgia
- Illinois
- Indiana
- Kentucky
- Michigan
- New York
- North Carolina
- Ohio
- Pennsylvania
- South Carolina
- Tennessee
- Virginia
Additional Resources And Links For Illinois Contractors Seeking Insurance
- Illinois Department of Insurance: https://idoi.illinois.gov/
- Illinois Department of Labor: https://idfpr.illinois.gov/
- The National Association of Home Builders (NAHB): https://www.nahb.org/
- The Associated General Contractors of America (AGC): https://www.agc.org/
- The Allen Thomas Group Website: https://allenthomasgroup.com/
- Sample Construction Contract Template: https://store.nolo.com/products/business-suite/business-operations/independent-contractor-agreements
- Glossary of Insurance Terms: https://www.iii.org/resource-center/iii-glossary
We Provide Coverage Options For All Trades Listed Below
- Appliance Repair
- Carpenter
- Concrete Contractor
- Drywall Contractor
- Electrician
- Excavation
- Fence Installation
- Flooring Contractors
- General Contractor
- HVAC Contractor
- Handyman Services
- Home Renovation and Remodeling
- Landscaper
- Masonry
- Painter
- Paving Contractor
- Plumber
- Roofing Contractor
- Sheet Metal Contractor
- Snow Plowing
- Steel Erectors
- Tile and Stone Installation Contractor
- Utility Contractor
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