A contractor should call his insurance agent before starting a new venture for several reasons:
- Coverage Needs: New ventures often come with different risks and liabilities. The contractor might need additional coverage or a different type of policy to protect against these new exposures.
- Policy Updates: The insurance agent can review the current policy to ensure it is up-to-date and adequate for the new venture. This might involve increasing limits or adding endorsements.
- Risk Management: The agent can provide advice on risk management practices that can minimize potential losses in the new venture.
- Contractual Requirements: If the new venture involves contracts with clients or partners, there might be specific insurance requirements stated in those contracts. The agent can ensure compliance with these requirements.
- Licensing and Permitting: Some municipalities or states may have specific insurance requirements for obtaining licenses or permits. The agent can provide guidance on this.
- Cost Predictability: By discussing the new venture, the contractor can get a clearer picture of potential insurance costs, which can aid in budgeting and financial planning.
- Peace of Mind: Knowing that they’re properly insured allows the contractor to focus on the new venture without constantly worrying about unforeseen liabilities.
- Avoiding Gaps: It’s essential to ensure there are no coverage gaps that could leave the contractor vulnerable. For instance, if the new venture is in a different state, there might be specific state-mandated coverages needed.
- Potential Discounts: The agent might be aware of discounts or bundled policies that can provide better value to the contractor.
- Building a Relationship: Regular communication strengthens the relationship between the contractor and the insurance agent, leading to better service and understanding of needs in the long run.
In short, proactively discussing any changes or new ventures with an insurance agent ensures that the contractor is adequately protected and compliant with any insurance-related requirements.