Running a roofing business involves significant risks, from potential property damage during a project to employee injuries on site. Because accidents can carry substantial financial consequences, comprehensive insurance coverage is a necessary investment. This protection is vital for safeguarding the business’s assets, maintaining its professional reputation, and ensuring its long-term viability in a competitive industry.
General Liability Insurance
General liability insurance protects a roofing business against claims from third parties for bodily injury or property damage. This coverage addresses incidents that are not related to your direct employees or your own business property. For instance, if a stack of shingles slides off a roof and damages a homeowner’s landscaping or vehicle, general liability is designed to cover the repair or replacement costs.
The policy also responds to claims of bodily injury. A common scenario involves a visitor to the property, such as a neighbor or the client, being struck by a falling tool or piece of debris. Should an injury occur, this insurance helps pay for medical expenses and potential legal fees if a lawsuit follows. Proof of general liability insurance is often the first document a homeowner will request, as it provides them with peace of mind.
General liability does not extend to covering injuries sustained by your own crew; that falls under a different type of policy. Likewise, if your own equipment, such as a nail gun, is damaged or stolen from the job site, this policy would not cover the loss. The focus of general liability is on damage or injury caused to others. Many roofing companies select policies with limits between $2 million and $5 million to account for worst-case scenarios.
Workers’ Compensation Insurance
Roofing is one of the more dangerous occupations, making employee safety a primary concern. Workers’ compensation insurance is designed to address this, providing a safety net for your crew. This coverage pays for medical care and a portion of lost wages for employees who are injured while performing their job duties, whether from a fall or a strain from lifting heavy materials.
In nearly every state, carrying workers’ compensation is a legal mandate for any roofing business with employees. Failing to have this coverage can lead to severe penalties, including substantial daily fines and even criminal charges. By covering injury-related expenses, it also shields the homeowner from being held financially liable for accidents that occur on their property.
This policy is exclusively for your employees and is separate from general liability insurance, which covers non-employees such as the client or visitors. This distinction ensures that all parties involved in a roofing project are appropriately protected.
Commercial Auto Insurance
Any vehicle used for business operations, whether it’s a truck hauling materials or a van transporting the crew, requires specific coverage. A personal auto insurance policy will almost certainly contain an exclusion for business use, meaning it will not cover an accident while driving to a job site. This gap is filled by commercial auto insurance.
This insurance provides liability coverage if one of your business vehicles is at fault in an accident that causes property damage or bodily injury to another party. For example, if your work truck rear-ends another car while en route to a project, commercial auto insurance would help cover the damages to the other vehicle and any resulting medical bills.
Beyond liability, these policies can be structured to include physical damage coverage for your own vehicles. This means that if your truck is damaged in a collision or is stolen from a supply yard, the policy can help pay for the repairs or replacement. This protection is a practical component of a roofer’s risk management strategy.
Other Important Insurance Coverage
Beyond the main policies, several other types of coverage address more specific risks in the roofing trade. These specialized policies fill gaps left by broader insurance, ensuring the business is protected from multiple angles.
Inland Marine Insurance
Often referred to as tool and equipment insurance, inland marine insurance protects a contractor’s movable property. This policy covers your tools, equipment, and materials while they are being transported to a job or stored at a work site. If a high-value piece of equipment like a shingle hoist is stolen from a client’s property, this is the policy that would cover the replacement cost.
Umbrella Insurance
Commercial umbrella insurance acts as an additional layer of financial protection. This policy sits on top of your existing general liability and commercial auto policies and activates only when the liability limits of those policies have been exhausted. For example, if a major lawsuit exceeds your general liability limit, the umbrella policy would cover the remaining amount, up to its own separate limit.
Professional Liability Insurance
Also known as Errors and Omissions (E&O) insurance, professional liability coverage addresses financial loss to a client due to a mistake in your professional services, rather than direct physical damage. For instance, if a contractor provides a faulty roof design that fails to account for proper drainage, leading to chronic water issues, E&O insurance would cover that financial loss.
Understanding Surety Bonds
Surety bonds are often discussed alongside insurance, but they are different products. A surety bond is not an insurance policy that protects the contractor. Instead, it is a three-party guarantee that protects the client, ensuring the contractor will fulfill their contractual obligations, such as completing the project on time and to specifications.
If the roofing contractor fails to meet the terms of the contract, the surety company steps in. The surety may pay to hire another contractor to finish the work or compensate the client for their financial loss. The surety company will then turn to the original contractor to be reimbursed for these costs. Many government and large commercial projects require contractors to be bonded to bid on the work.
The primary difference is the direction of protection. Insurance is a two-party agreement where the insurer pays for the contractor’s covered losses. A bond is a three-party agreement where the surety guarantees the contractor’s performance to the client, providing a financial backstop against contractor failure.
How to Find the Right Insurance Provider
Securing the right insurance requires more than picking the cheapest option. For a high-risk profession like roofing, it is beneficial to work with an insurance agent or broker who specializes in construction. These professionals understand the unique risks roofers face and can identify potential coverage gaps a generalist agent might miss. They are familiar with specific endorsements that can make a difference at the time of a claim.
When evaluating potential providers, a contractor should obtain multiple quotes to compare not just the price, but the details of the coverage. Pay close attention to the policy limits, deductibles, and exclusions. An exclusion for work on buildings over a certain height, for example, could render a policy useless. Bundling multiple policies with the same provider can sometimes lead to discounts.
The goal is to build a relationship with a provider who acts as a risk management partner. A knowledgeable agent can offer advice on safety protocols that might help lower premiums over time. They can also be a valuable advocate during the claims process.