5 Insurance Mistakes Contractors Make (and Fixes)

Contractors often carry the wrong coverage or not enough of it. Learn the 5 most common insurance mistakes and how to protect your business.

Risk Management | 5 min read | 2026-02-15

Most contractors don't find out they're underinsured until a claim hits. Here are the five gaps we see most often — and how to close them before they cost you.

Many contractors purchase a $1M/$2M general liability policy because it's the cheapest option that satisfies contract requirements. The problem? A single serious bodily injury claim can exceed $1M before legal fees are even factored in.

In This Article

• 1. Carrying Only the Minimum GL Limits
• 2. Skipping Workers' Comp When 'Everyone Is a Sub'
• 3. Not Insuring Tools and Equipment Separately
• 4. Using Personal Auto for Business
• 5. Failing to Update Coverage When the Business Grows

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