Many small contractors feel secure just because they have some type of insurance — but that doesn’t always mean they’re fully protected. There’s a big difference between being insured and being properly insured. This is where the concept of being “underinsured” comes in, and it’s more common than most people think.
Being underinsured means that you technically have coverage, but it’s either too limited or doesn’t cover the actual risks you face. Maybe your policy doesn’t include coverage for your tools, or the liability limit is too low to protect you if something major happens. Sometimes, contractors don’t realize that their plan excludes certain types of work — until they try to file a claim and it gets denied.
Take this example: a painter has general liability insurance, but no coverage for his tools. After a theft from his van, he finds out that stolen equipment isn’t included in his policy — and he’s left paying out of pocket to replace everything. It’s a frustrating and expensive lesson that could’ve been avoided with the right coverage.
The good news is that this can be fixed easily. Reviewing your policy once a year, especially as your business grows or changes, is key. And working with someone who understands the specifics of contractor insurance makes all the difference. You don’t just want “some” coverage — you want the right coverage. That’s what keeps your business truly protected.
