Contractors face immense risks daily from potential injuries, property damage, lawsuits, and costly unforeseen events that could financially devastate their business without proper safeguards. Carrying adequate insurance tailored to address these myriad hazards is absolutely vital for all contractors, whether a new solo operation or an established firm with multiple crews.

This comprehensive guide examines the critical insurance policies contractors need and why they are essential for risk mitigation plus business growth. To help inform this guide, we analyzed quotes for over 700 contractor businesses from leading insurance carriers across all 50 states. Our insights serve as helpful benchmarks as you explore coverage and costs. Our guide is aimed to be comprehensive and it explores key topics like:

  • Why Contractors Need Insurance
  • What Insurance Do Contractors Need
  • ContractorNerd’s Study: Cost of Contractor Insurance
  • Strategies for Cost Savings
  • Why Insure with ContractorNerd
  • FAQs on Contractor Insurance

The aim is to equip contractors with actionable insurance expertise enabling informed, affordable coverage so they can confidently take on projects knowing risks are transferred. In addition, we have also prepared extensive guides focusing on General Liability Insurance for Contractors and Workers Compensation Insurance for Contractors. Further, we recognize the importance of local regulations and provisions, so we’ve included state-specific guides tailored for all 50 states:

If you’re looking for guides related to your specific trade, you can find our guides for the following trades here:

What Insurance Do Contractors Need?

For general contractors, understanding the necessary insurance coverages is essential for risk management and legal compliance. Your coverage needs change as your business grows. Below are typical insurance coverage needs by business stage:

  • Sole Proprietor Contractors – Early on, general liability insurance and inland marine coverage for tools is essential. Commercial auto insurance is wise if investing in a work truck.
  • Small Contracting Business (2-3 employees) – Once you begin hiring employees, adding workers’ compensation is crucial for legal compliance and to show you value your workers. Umbrella insurance provides additional liability limits as your project values increase.
  • Established Contracting Company (5+ employees) – As you scale up, commercial property insurance for any warehouses, equipment yards, or offices is important. Cyber liability should be considered if collecting customer data. Employment practices liability protects against potential lawsuits as your workforce grows.

The fundamental policies include:

  1. General Liability Insurance: This is a crucial policy offering protection against third-party property damage and bodily injury claims related to your business operations and completed projects. It covers legal expenses, settlements, medical costs, and clean-up costs arising from your contracting work. The policy addresses a wide range of claims, including bodily harm, property damage, and advertising injury, and covers both active and passive negligence.
  2. Workers’ Compensation Insurance: Mandatory for businesses with employees, this insurance provides medical treatment, wage replacement, death benefits, and rehabilitation for employees injured on the job. Coverage requirements and rates vary by state, depending on factors like employee numbers and job risks.
  3. Commercial Auto Insurance: Essential if your business uses vehicles for transporting materials or equipment. It covers vehicle damage and third-party liability in case of accidents involving business vehicles.
  4. Inland Marine Insurance: Highly recommended for safeguarding tools, machinery, and equipment during transport to job sites or when working off-site. This policy covers losses due to theft, damage, or loss of tools and equipment, which are critical assets for your business.
  5. Surety Bonds: While not insurance, surety bonds are often required for contractor licensing and by clients to guarantee satisfactory completion of contracted work. They provide financial assurance for repairs or corrections if issues arise with your work within the bond’s validity period.

Additionally, as your business expands, consider these insurance types:

  • Commercial Property Insurance: Protects the physical location of your business (owned or rented) and its contents from risks like fire, theft, and vandalism. It covers the building, equipment, materials, and inventory.
  • Commercial Umbrella Insurance: Offers extra liability coverage beyond your existing policies’ limits, valuable for substantial claims that exceed those limits.
  • Builder’s Risk Insurance: Essential for larger construction projects, covering the structure under construction against perils like theft, vandalism, and natural disasters.
  • Employment Practices Liability Insurance: Protects against claims of employment discrimination, wrongful termination, harassment, and other employment-related issues.
  • Cyber Liability Insurance: Vital if your business handles customer data. It safeguards against losses from data breaches, covering investigation costs, customer notification, credit monitoring, and legal expenses.

Total Cost of Contractor Insurance Programs

Your insurance premiums will grow as your business expands. Key factors like team size, years in business, and revenue influence your coverage needs and premiums. A major factor is your claims history. The longer you operate without claims, the more affordable your insurance. On the other hand, frequent claims result in higher premiums. Keep this in mind when evaluating your insurance needs.

We analyzed insurance costs for contractor businesses of various sizes across all 50 states. The insights from the 703 quotes we reviewed help to provide you with an idea of what you might pay based on your company’s size and location, although your specific situation may vary.

Here’s a summary of sample contractor businesses, typical insurance policies, and illustrative premiums. Remember every business is unique, so consult an insurance broker familiar with your precise risks. There are carriers specializing in contractors. Collaborating with a broker provides access to suitable carriers, enabling a tailored insurance program. We strongly recommend partnering with an expert who can access appropriate markets and construct an insurance portfolio protecting your contractor business.

Busineess Type:Coverages Included:Total Cost of Insurance:
Contractor Business
3 Employees
$500K Revenue
General Liability (GL) || $1M per occurrence / $2M total
Workers’ Compensation || *Required
Commercial Auto || $100K/$300K/$100K
Inland Marine || $25K
Bond || $25K
Contractor Business
5 Employees
$1M Revenue
General Liability (GL)|| $1M per occurrence / $2M total
Workers’ Compensation || *Required
Commercial Auto || 2 policies, each with $500K combined single-limit
Inland Marine || $50K
Bond || $50K
Umbrella || $1M
Contractor Business
10 Employees
$2.5M Revenue
General Liability (GL) || $1M per occurrence / $2M total
Workers’ Compensation || *Required
Commercial Auto || 3 policies, each with $1M combined single-limit
Inland Marine || $50K
Bond || $500K
Umbrella || $2M

General Liability Insurance for Contractors

General liability (GL) insurance shields your business if a third party alleges bodily injury or property damage caused by your operations. For contractors, premiums often range from 1-2% of yearly revenue for $1 million per occurrence and $2 million aggregate limits. For more information, please see our guide on General Liability Insurance for Contractors.

Contractor Liability Limits: $1 million per occurrence/$2 million aggregate. Experts recommend at least $1 million in liability coverage. As your business continues to grow, it is worth exploring an umbrella policy to offer additional liability protection.

Contractor Liability Premiums: 1-2% of annual revenue

Key Factors Impacting Contractor Liability Premium:

  • Revenue: Higher revenues mean expanded operations and greater claim exposure. This prompts higher premiums.
  • Location: Strict laws in your state can increase oversight expenses and premiums.
  • Services Offered: Diverse construction capabilities create unique risks that uniquely influence premiums. Evaluate all services to understand related expenses.
  • Claims History: Frequent past claims drive premiums upward. A clean record keeps GL affordable.

Here are average General Liability premiums for contractors by state and revenues:

State$500K Revenue$1M Revenue$2.5M Revenue
New York$14,500$25,600$75,600
North Carolina$5,200$8,500$23,600
Average Contractor Liability Premium by Revenue and State

Here are favorable General Liability premiums for painters as well as potential savings calculated off the average premiums above:

State$500K Revenue$1M Revenue$2.5M Revenue
Favorable RateImplied SavingsFavorable RateImplied SavingsFavorable RateImplied Savings
New York$11,60020%$16,50036%$50,70033%
North Carolina$2,50052%$4,70045%$12,50047%
Favorable Contractor Liability Premiums and Potential Savings Calculated from Average Premiums

Workers’ Compensation Insurance for Contractors

This covers employee injuries or illnesses experienced on the job. Premiums hinge on your team’s tasks, sorted into class codes by the NCCI. With over 600 codes, this helps insurers accurately categorize and price policies. Typical contractor class codes include 5606, 5645, and 5403 with rates ranging $2 to $17+ per $100 of payroll annually per worker with significant changes based on rate differences between class codes. For more information, please see our guide on Workers Compensation Insurance for Contractors.

Typical Limits: State-dependent

Typical Premium: $2 to $17+ per $100 of payroll

Influencing your workers’ compensation premium:

  • Class Codes: Employees are grouped by job type and danger level. More hazardous roles prompt higher premiums.
    – Code 5606 has the lowest rate. This code is meant for people who oversee construction projects, but not the ones who are actually on the ground doing the work. According to the official manual, this code doesn’t apply to anyone directly managing the work or workers. So, if you’re a project manager and you want to be under Code 5606, you have to manage through other supervisors like forepersons, not directly with the workers or subcontractors on site. If you don’t follow this, you might get shifted to another category like Code 5645 or 5403.
    – Code 5645 has a much higher rate but less than 5403. If you’re a contractor focused on small residential buildings—those with three floors or less—then Code 5645 is likely your appropriate code. It covers a wide range of construction tasks, such as building the initial frame, laying the basic flooring, installing siding, and doing the final carpentry touches. Keep in mind, this code is only for contractors whose work also includes building the main structure, like walls and support beams. If your project is more complex, like a tall apartment complex or a commercial building, then you will likely need to classify as 5403.
    – Code 5403 has the highest rate due to higher risk. Code 5403 is for building projects that don’t fit under any other specific category in the Worker’s Compensation (WC) guidelines. According to these guidelines, this code is mainly used for buildings that are more than three stories high. This could be residential buildings like apartment blocks or commercial buildings like office towers. Additionally, this code includes any carpentry jobs needed for the construction, as long as they don’t fall under another specific code.
  • State Laws: Each state controls workers’ compensation regulations including benefits, claims processes, and baseline insurance rates.
  • Experience Modifier: This number represents your safety record, starting at 1.0 then moving up or down based on claims. More claims drive the modifier and premiums upward.
  • Payroll Amount: A key factor is gross payroll, calculated as payroll / $100 * rate * experience modifier. Larger payrolls increase premiums.

Most and least expensive states for Contractor’s Workers Compensation Insurance:

StatePremium per $100K Payroll
South Carolina$21,480
Most Expensive WC Premium States for Contractors

StatePremium per $100K Payroll
North Dakota$3,510
Least Expensive WC Premium States for Contractors

Commercial Auto Insurance

This covers vehicles used for business purposes if an accident occurs. For contractors, premiums range from $1,000 to $4,000 per vehicle annually.

Typical Limits: $500k to $1M combined single-limit

Typical Premium: $1,000 to $4,000 per vehicle

Influencing your commercial auto premium:

  • Number of Vehicles: More vehicles expand your accident exposure. Additional vehicles increase premiums.
  • Vehicle Type: Larger vehicles like trucks and vans have greater damage potential, increasing costs.
  • Driving Records: Drivers with accidents or citations raise your premium.

Surety Bonds

Surety bonds provide assurance contractors will satisfy their contractual duties. Requirements vary significantly by location and project. Typical bond sums range from $10,000 to $500,000 or more. Instead of paying the full bond amount upfront, contractors typically pay 1-3% as a premium. Meeting bond rules displays professionalism, reliability, and dedication to customer fulfillment.

Typical Limits: Project and Location Dependent

For example, California requires contractors to carry a $25,000 contractor bond to operate independently. Verify your compliance with all local and project mandates.

Typical Premium: 1-3% of Bond Amount [more for low-credit buyers]

Your bond premium depends on:

  • Bond Amount: Higher sums equal greater premiums.
  • Credit Score: Lower scores may indicate higher default risk, elevating your premium.

Builder’s Risk Insurance

This covers construction projects while underway in case of damage. For contractors, premiums typically range from 0.15% to 0.75% of the project value.

Typical Limits: Project value

Typical Premium: 0.15% to 0.75% of the project value

Your builder’s risk insurance costs depend on:

  • Project Value: More expensive projects have greater claim exposure, increasing premiums.
  • Project Duration: Longer projects may warrant higher premiums.
  • Project Type: Complex or hazardous projects like high-rises may boost costs.

Inland Marine (Equipment) Insurance

This protects tools and equipment onsite and in transit. For contractors, annual premiums often ~10% of the total limits, so if you’re insuring tools from $15K to $50K, expect to pay ~$1,500 to $5,000+ in annual premiums.

Typical Limits: $15k to $50k

Typical Premium: $1,500 to $5,000+ annually

Your inland marine premium is influenced by:

  • Equipment Value: Pricier equipment prompts larger potential claim payouts from insurers, elevating premiums.
  • Intended Use: Equipment utilized for hazardous applications may have higher premiums.
  • Storage/Transport: Tools stored or moved in high-crime venues may cost more to insure.

Commercial Property Insurance

This insures buildings, offices, warehouses, and other business properties against damage from theft, fire, storms, vandalism and more. For contractors, annual premiums often range from $2,000 to $20,000+.

Typical Limits: Based on property value

Typical Premium: $2,000 to $20,000+ annually

Your commercial property premium depends on:

  • Property Value: More valuable properties have greater claim potential, increasing premiums.
  • Location: Areas prone to natural disasters or crime may increase costs.
  • Construction Type: Fire-resistant buildings may qualify for discounts.

Umbrella Liability Insurance

This provides extra liability protection above your other policies’ limits. For an additional $1 million in coverage, contractors often pay $1,000 to $2,000+ in annual premiums. High-risk firms may pay more.

Typical Limits: $1M ($3M+ for larger contractors)

Typical Premium: $1,000 to $2,000+ annually

Your umbrella insurance costs are influenced by:

  • Company Size: Large contractors have more exposure and claim potential, warranting greater premiums.
  • Services: Specialized or hazardous work may increase costs.
  • Location: State laws, risks, and cost of living sway pricing.
  • Claims History: Repeated past claims result in higher umbrella premiums.

Employment Practices Liability Insurance

Employment practices liability insurance (EPLI) shields contractors from employment-related lawsuits alleging discrimination, wrongful termination, harassment, and other employee claims. For mid-sized contractor teams, yearly EPLI premiums often run $2,500 to $7,500+.

Typical Limits: $500k to $1M

Typical Premium: $2,500 to $7,500+ annually

Your EPLI premium depends on:

  • Number of Employees: More personnel expands exposure to claims.
  • Revenue: Larger payrolls and revenues pose greater risks.
  • Claims History: Past claims increase future premiums.
  • State Laws: Local regulations like wrongful termination laws affect pricing.

Cyber Liability Insurance

Cyber liability insurance is critical for contractors leveraging technology to manage operations. It defends against data breaches, hacking, and electronic theft. For mid-sized contractors, annual premiums often range from $1,000 to $5,000+.

Typical Limits: $500k to $2M+

Typical Premium: $1,000 to $5,000+ annually

Your cyber insurance costs depend on:

  • Revenue: Bigger budgets appear more lucrative to hackers.
  • IT Infrastructure: Strength of firewalls, encryption, and security affect pricing.
  • Data Handled: Sensitive customer data may increase costs.
  • Industry: Construction poses lower cyber risks than sectors like healthcare.

Strategies for Cost Savings

Beyond upholding robust safety protocols and a clean claims history, contractors can utilize additional techniques to reduce insurance expenditures:

  • Increase Deductibles: Choosing higher deductibles lowers premiums, but boosts your out-of-pocket costs if a claim occurs. Evaluate risk tolerance before adjusting.
  • Bundle Policies: Bundling multiple policies with one insurer often earns a multi-policy discount. Combine GL, commercial auto, inland marine, workers’ compensation, umbrella, and other coverages.
  • Leverage Associations: Industry association memberships frequently provide access to discounted group insurance programs.
  • Review Limits Annually: As your business evolves, re-evaluate insurance limits across policies to avoid over or under-insuring.
  • Implement Safety Plans: Documented safety protocols like site inspections, equipment maintenance, materials handling procedures, and incident investigation showcase your risk management, potentially lowering premiums.
  • Choose a Lower Loss Ratio Insurer: Insurers with loss ratios below 60% spend less on claims versus premiums collected, yielding possible savings.
  • Watch Payroll Closely: Payroll directly affects workers’ compensation premiums. Keep payroll tightly aligned with exposure.
  • Request Higher Deductibles: Ask about deductible options. Higher deductibles lower premiums but increase out-of-pocket claim costs.

Why Insure Your Contracting Business With ContractorNerd?

Our network of contractor insurance specialists stands apart, offering expertise tailored to your specific needs. With years dedicated to the contractor industry, our network of agents help you navigate custom coverage, competitive rates, and efficient service.

At the heart of our service is a unique platform that combines advanced technology with human understanding. This ensures you’re paired with the best-suited agent who understands the nuances of your trade.

We have carefully built relationships with top contractor insurance agents across the country. This means you get personalized service from an agent who fully comprehends the intricacies of your business. They will shop multiple carriers to find you the right policy with the coverages you need at the best available rate.

Choose for unmatched expertise and streamlined insurance solutions.

Contractor FAQs

What insurance do I need to start a construction company?

To start a construction company, at minimum obtain general liability, workers compensation if employees, and auto insurance for company vehicles. Also consider umbrella, builder’s risk, professional liability if applicable, cyber/data breach, and tool coverage. Require subs to carry adequate insurance naming your company as additional insured. Start with 1M/2M general liability and higher umbrella limits. Buy enough auto coverage for equipment transported. Have a risk management plan for premium discounts. Adjust coverage as the company grows by volume and risk. As a contractor you’ll want to work with an independent agent who specializes in contractor insurance. They will have access to multiple carriers and can work with you to secure and compare quotes from multiple providers when your policies are up for renewal.

What insurance do I need as a residential contractor?

As a residential contractor, you’ll typically need general liability, workers compensation if you have employees, and auto insurance for company vehicles. Require subs to carry adequate insurance and name you as additional insured. Get at least $1M per occurrence general liability and higher umbrella coverage. Report payroll accurately and provide certificates to homeowners when required. Avoid exclusions for risks like mold and water damage. Consider optional policies like tools coverage and builders risk when applicable. Have a risk management plan for discounts. Meet all licensing and contract requirements for insurance. Increase coverage along with company growth. Use an agent who specializes with residential construction insurance. To get the best rates, you’ll want to team up with an agent who’s an expert in insurance just for contractors. This person can show you options from many different insurance companies and help you pick the best one when you need to renew your policies.

What insurance do I need for my construction LLC?

For a construction LLC, recommended insurance includes: general liability to cover third party property damage and bodily injury claims; workers compensation if you have employees; commercial auto for company vehicles; umbrella coverage to increase liability limits; cyber/data breach policies; equipment coverage or inland marine for tools; and builders risk when required for projects.Require subs to carry adequate insurance, naming your LLC as additional insured. Start with $1M general liability limits and higher umbrella coverage.Find an insurance agent who specializes in what you do. They can go to different insurance places and get you different quotes, helping you find the best deal when you have to renew your insurance.

What insurance should I get as a new general contractor doing custom homes?

As a new general contractor, get at least $1 million in general liability insurance and consider a $2-5 million umbrella policy per occurrence. Also get workers compensation if you have employees and commercial auto for all company vehicles. Require subs to have equal or higher coverage with you listed as additional insured. At renewal, provide documentation showing subs were insured. Keep detailed records showing all payments to subs and no cash payments. Expect increased scrutiny from auditors initially. Rates will improve after a claim-free period. You’ll want to have an insurance agent who specializes helping contractors with contractor insurance. When it’s time to renew your policies, they can check with a bunch of different companies and help you figure out which one offers the best deal.

Is tool insurance worth it for theft or damage protection?

Tool insurance can be worth it depending on the policy details. Make sure it covers theft from vehicles and jobsites, as these are common. Avoid policies requiring itemized schedules and receipts to recover full replacement cost. Look for inland marine policies bundled with homeowners or business insurance. Premium costs are usually reasonable compared to potential lost tools. Without insurance, out of pocket expenses to replace stolen tools can be thousands. However, some policies only pay depreciated value, leaving you underinsured. Weigh premium costs vs your risk tolerance. For expensive tool sets, insurance is likely worthwhile for full replacement coverage without hassles. For basic tools, self insuring may be acceptable.

What insurance considerations are important for general contractors?

Key insurance considerations for general contractors include: adequate general liability limits; requiring subs to have equal coverage and be additional insureds; umbrella policies to increase total coverage; avoiding exclusions for high risk work like demolition or roofing if performed; separating bonding and liability carriers; having risk management programs that provide premium credits; shopping rates regularly when policies renew; keeping detailed records of sub payments; accurately reporting payroll; promptly requesting certificates for clients; asking for insurance requirements on bids; obtaining coverage needed for licensing like builders risk; and securing special endorsements required in litigious jurisdictions. Meeting all insurance obligations is crucial for risk mitigation as a general contractor.

How can I easily provide certificates of insurance when bidding projects?

The easiest way is through an insurance broker or carrier with online certificate issuance. Submit requests electronically without contacting an agent. Some direct writers like Next Insurance offer self-service certificates. Review policy management portals for on-demand features. If unavailable, send certificate requests by email to your agent providing necessary details. Utilize pre-approval and blanket additional insured options when possible for frequent clients. Confirm any special wording requirements are met. Do not rely on agents to remember your certificate obligations. Build certificate issuance time into your bids and schedules. Set calendar reminders for renewals. For quick turnaround, use a carrier portal or broker with 24/7 certificate issuance.

Do I need builder’s risk insurance for an outdoor construction project?

Builder’s risk insurance may be required even for outdoor projects without buildings. It covers materials and equipment during construction. Review contract specs closely for insurance requirements. Builder’s risk applies to any improvements or construction work, not just buildings. For parks, courts, site work, etc it still provides valuable coverage. The premium is usually reasonable, around 0.25% of the project cost. Include this coverage in your bid if specified. For public contracts especially, all stated insurance requirements normally must be met. Builder’s risk can cover materials in transit, temporary structures, and damage during construction not caused by a contractor. Talk to your agent to understand exact policy coverage and exclusions based on the project scope.

What is the process for getting contractor’s insurance?

The application process involves estimating revenue, payroll, defining your type of work including trade/specialty work performed, providing loss history, and potentially listing projects. Premiums are calculated based on risk, payroll, experience, and other factors. Provide details on subcontracted trades. Expect a policy audit after the first year.

Can I get affordable contractors insurance with no experience?

New contractors with no experience will pay higher premiums at first. This is because new contractors lack a proven loss history. Maintain rigorous safety practices to build a good loss history over time and you can expect your premiums to go down alongside your proven loss history. If possible, avoid high-risk trades to qualify for lower rates. It’s smart to get an insurance agent who specializes in contractor insurance. They’ll have access to insurance carriers that want to insure contractors and can help you compare different options when your insurance is up for renewal.

What is the difference between general contractors insurance and trade contractor insurance?

General contractors insurance covers oversight of the full project, including liability for subcontractors. Trade contractors like electricians have liability just for their specialized work. GC policies cost more but provide higher coverage limits to oversee many trades. Because general contractors oversee entire projects, their insurance needs are broad, including general liability to cover injuries, property damage, and negligence; GCs also require workers compensation for any direct employees. In contrast, trade contractors have more specialized skills like electrical, plumbing, etc. so their insurance can be more targeted. Trade contractors need liability insurance for their particular skill, such as electrician’s liability insurance. They are not responsible for the whole job site so their insurance needs are narrower. Finally, general contractors may also need bonds or project-specific policies. Understanding the scope of work determines the type and level of insurance contractors need. Insurance needs can get complex quickly, so get an insurance agent who knows all about the insurance you’ll need. They can source quotes from carriers who work with GCs or specific trades, so you can see which one is the best deal when you have to renew your insurance.

Does contractors insurance cover subcontractors?

Contractors insurance typically does not cover subcontractors hired by a business. Subcontractors should have their own insurance policies, including general liability, workers’ compensation, and professional liability. Before hiring a subcontractor, a business should require proof of their insurance coverage. If the subcontractor lacks adequate insurance, the hiring business can be held responsible for any incidents or claims, even if caused by the subcontractor. A business has two options if a subcontractor lacks sufficient coverage – do not hire them or purchase additional insurance to cover the subcontractor. A contractor’s liability policy usually only covers their employees, not subcontractors. However, a business can contact their insurer to add subcontractors to their existing policies. This may include liability, workers’ comp, auto, equipment, and builders risk policies. Subcontractors normally have business owners policies with liability, property damage, and interruption coverage. GCs should review their policies, require COIs from all subcontractors before allowing them on site, and extend their own policies if the subcontractor’s coverage is insufficient. This helps mitigate risks from uninsured subcontractors.

What is the difference between bonding and insurance for contractors?

Insurance covers losses, injuries, and accidents. Bonds guarantee contract performance and financial capability. Both protect the customer but serve different purposes. Bonding is project-specific. Insurance should always be maintained even without bonding. A performance bond guarantees the contractor will complete the project per the contract. A payment bond ensures subcontractors and suppliers are paid. If the contractor fails to uphold their end of the deal, the surety pays the owner and the contractor must reimburse them. In contrast, general liability insurance covers damages and legal costs if the contractor is sued for property damage or bodily injury. It protects the contractor, not the owner. The insurance company handles the claim and the contractor doesn’t pay them back. Smart contractors carry both bonds to reassure owners and insurance to safeguard their business.