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Starting A Business

Contractor Insurance: What It Is, How to Get It



Contractor insurance protects your construction business in case of lawsuits, on-the-job injuries, damage to your equipment and more. You may be required, either by law or the company that hired you, to have this coverage.

Most contractors need several business insurance policies to protect against these different risks, but you can usually buy them together from the same insurance company. Here’s how to find the best contractor insurance for you.

What is contractor insurance?

Contractor insurance is usually a package of insurance policies that protects your business from financial losses in case someone files a claim against you.

Most contractors need general liability insurance and inland marine insurance. Whether you need other types of coverage depends on how big your company is, what’s required in your state and what kind of work you do, among other factors.

What’s the best fit for your business?

Answer a few questions and we’ll match you with an insurance partner who can help you secure quotes.

Contractor insurance is important in situations like:

  • You accidentally cause damage to a customer’s home or belongings while repairing one of their appliances.

  • Your materials are stolen out of your truck.

  • A customer accuses you of faulty work and files a lawsuit.

What does contractor insurance cover?

Type of insurance

What it covers

Business liability for third-party bodily injury, property damage and more. Your general contractor may require you to carry general liability insurance to protect your business and others on the project in case of lawsuits.

For example, if you spill paint on a customer’s one-of-a-kind rug, the customer could sue you for the cost of replacing the rug. General liability insurance can help cover your legal and settlement costs.

Business property while it’s being transported, or while it’s being stored by a third party.

If you’re driving from one landscaping project to another and supplies are stolen from your truck while you’re stopped at a gas station, inland marine insurance will cover replacement costs.

Damage or loss to buildings during construction or renovation as a result of fire, weather events, vandalism or other hazards.

If the windows of a house that your company is building are broken during a windstorm, builder’s risk insurance can cover the cost to replace them.

Employees who are injured or get sick while at work. Almost every state requires employers to have workers’ comp for their employees.

If your employee falls off a ladder while painting a house and breaks an arm, their medical expenses would be covered under workers’ compensation.

Vehicles that you use in the course of doing business. Protects you from expenses related to accidents, such as property damage and injuries.

If you’re backing up your electrician’s van and collide with another driver, your commercial auto insurance will cover damage to the car and any injuries the driver receives.

Business property that’s damaged by certain accidents, weather events or other hazards.

A fire destroying your roofing inventory (shingles, tiles, other materials) would be covered under your commercial property insurance.

Claims against your business for mistakes or oversights in performing a service, breach of contract, professional negligence or failure to deliver a service on time.

If a client sues your general contracting company for missing the deadline on a construction project, your professional liability policy would cover legal and settlement costs.

How much does contractor insurance cost?

Median costs for contractor insurance can add up to as much as $595 per month, according to business insurance marketplace Insureon. That estimate is based upon purchasing multiple individual policies, though, and you may not need all that coverage.

Insureon reports the following median costs of insurance policies for contractors:

  • Less than $70 per month for general liability insurance.

  • $275 per month for workers’ compensation insurance.

  • $150 per month for commercial auto insurance.

  • Less than $15 per month for contractors’ tools and equipment insurance, which is a kind of inland marine insurance.

  • $85 per month for professional liability insurance.

How much business insurance costs can vary widely depending on how big your business is, where you’re located and whether you’ve filed insurance claims in the past. Policies with higher limits or lower deductibles are usually more expensive.

There’s variation within the construction industry, too. For example, roofers may pay twice as much for general liability insurance as plumbers and five times as much as sheet metal contractors, according to Insureon. That’s because roofing comes with higher risks — both for injury and for causing damage to customer property.

Insurance companies tell you how much contractor insurance will cost when they give you a quote. NerdWallet recommends comparing several quotes to find the best coverage for your business at the best price.

Where can you get contractor insurance?

Lots of insurance companies sell the policies that contractors need. Which company fits your needs best depends on how quickly you need to shop.

If you need coverage right away, consider:

  • Thimble. If you’re the person hiring other contractors, you can use Thimble to make sure they have insurance that complies with your requirements. And if you’re the contractor who needs coverage, you can purchase a temporary or ongoing policy through Thimble.

  • Next Insurance. If you want coverage tailored to your specialty, Next sells insurance packages for everyone from drywall contractors to welders. Once you buy a policy, you can share certificates of insurance digitally with clients and contractors who request them.

Both Thimble and Next sell insurance entirely online. You can get a quote online by entering information about your business. If you decide to buy the quoted policy, you can do so online right away.

If you have more time and want hands-on support, consider:

  • Nationwide. If you want to customize your policy — like setting a per-project policy limit or adding pollution coverage, which is usually excluded from commercial general liability policies — Nationwide’s contractor insurance may be a good fit. Nationwide also sells construction bonds.

  • The Hartford. If you want a business owner’s policy, The Hartford offers one with lots of add-ons tailored to contractors — like coverage for your tools and equipment and protection against damage to property you’re installing.

Nationwide and The Hartford’s contractor insurance policies are sold through independent agents. A local insurance agent can help you figure out what policies you need and compare quotes from these providers and others.


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Starting A Business

4 Tips for Starting an Industrial Business



The industrial sector is a broad category that covers businesses involved in the manufacturing, production, and distribution of goods. Small industrial companies are growing across the country and there are many opportunities for entrepreneurs to get involved in this sector.

As with any type of business, there are certain things you need to do to set yourself up for success. Here are four tips for starting an industrial business:

photo credit: Pixabay

1. Do Your Research

Market research means figuring out who your target customers are and what they want or need. There are a number of different ways to do this, but some of the most common include surveys, interviews, focus groups, and observation.

Surveys can give you a good overview of customer opinions while interviews or focus groups can help you to delve deeper into specific issues. Observing potential customers in their natural environment can also be helpful in understanding their behavior and needs.

2. Choose the Right Niche

When it comes to starting an industrial business, one of the most important decisions you’ll make is choosing the right niche. There are a number of factors to consider when making this choice, and it’s important to do your research before settling on a particular industry.

First, you’ll need to identify the needs of your potential customer base, such as the products or services they need. Once you have a good understanding of the market, you can then start to narrow down your options. Consider the competition in each niche and decide which one offers the best opportunity for success. When making your final decision, it’s essential to choose a niche that you’re passionate about.

3. Create a Business Plan

In today’s competitive marketplace, it’s more important than ever to choose the right niche for your industrial business. When you specialize in a specific industry or type of product, you can better meet the needs of your target market and stand out from the competition. How do you know what niche is right for your business? Here are a few things to consider:

First, think about your strengths. What does your company do better than anyone else? What unique skills or experience do you bring to the table? Use these strengths to narrow down your focus and choose a niche that you’re passionate about.

Next, consider your target market. Who are you trying to reach with your products or services? What needs do they have that you can address? When you choose a target market and understand their needs, you’ll be better able to choose a niche that meets their demands.

Finally, don’t be afraid to experiment. Trying new things is essential for any business, so don’t be afraid to test out different niches to see what works best for you. By keeping these tips in mind, you can be sure to choose the right niche for your industrial business.

Engineers work with industrial printer

4. Optimize Your Processes

Through industrial control engineering, you will be able to identify opportunities for improvement and design solutions that achieve the desired results. In many cases, these solutions involve the use of automation and other advanced technologies.

By optimizing industrial business processes, industrial control engineers can help to improve efficiency and increase productivity. In addition, they can also help to improve safety conditions by reducing the potential for accidents. As industries continue to grow and become more complex, the demand for qualified industrial control engineers is likely to increase.


With an increased demand for industrial operations and manufacturing, there has never been a better time to start an industrial business. By following these four tips, you can be sure to set your business up for success.

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Starting A Business

How to Find the Right Business Coach — and Avoid the Wrong One



At its best, business coaching can connect you with a mentor and supporter who helps you generate ideas, make plans and execute on them.

But at its worst, a business coaching offer can cost you time, energy and money — without much to show for it.

Here’s what to expect from a business coach, how to find a coach that suits you and how to spot red flags.

What a business coach can do

Business coaches draw on their professional experience to help you set and achieve your own business goals.

“I’m here to help you, and I’m here to raise your level of knowledge in whatever way I can,” says Gary Robinson, who chairs the Memphis, Tennessee, chapter of SCORE. SCORE offers free business mentoring for entrepreneurs nationwide.

Some ways a business coach or mentor might do this include:

  • Offering feedback on your ideas and suggesting new ones.

  • Giving you templates and other tools that help you make plans.

  • Connecting you with resources in your region or your industry.

  • Giving you deadlines and holding you accountable to them.

Some business coaches may also offer coursework or group training sessions on particular topics, like sales.

Working with a coach should help you identify opportunities you hadn’t seen before or develop new strategies for pursuing those opportunities, says Sophia Sunwoo, who coaches women and nonbinary entrepreneurs through Ascent Strategy, her New York City-based firm.

“[Coaches] don’t necessarily have to have all the answers,” Sunwoo says. “But they are the people that know how to maneuver and create a bunch of different thinking paths for their clients.”

What a business coach can’t do

A business coach isn’t the same as a consultant, whom you would hire to perform a specific task. A coach or mentor could look over your business plan, for example, but they wouldn’t write it for you.

“If you were to hire me as a consultant, you would expect me to roll up my sleeves and pitch in and work with you to get things done, and you would pay me for that,” Robinson says. Coaches, on the other hand, “try to show you how to do things so that you can do them [yourself].”

Business coaches are also not therapists, Sunwoo says. Entrepreneurship can be emotionally and mentally taxing, but it’s important that coaches refer clients to mental health professionals when necessary.

Business coaching red flags

If a business coaching opportunity “promises guaranteed income, large returns, or a ‘proven system,’ it’s likely a scam,” the Federal Trade Commission warned in a December 2020 notice.

In 2018, the FTC took legal action against My Online Business Education and Digital Altitude, which purported to help entrepreneurs start online businesses. The FTC alleged these companies charged participants more and more money to work through their programs, with few customers earning the promised returns.

In both cases, these operations paid settlements, and the FTC issued refunds to tens of thousands of their customers in 2021 and 2022.

To avoid offers like these, the FTC recommends that you:

  • Be wary of anyone who tries to upsell you right away or pressures you to make a quick decision.

  • Search for reviews of the person or organization online.

  • Research your coach’s background to see if they’ve accomplished as much as they say.

Sunwoo says to also be skeptical of one-size-fits-all solutions. A coach should customize their advice to your personality and skill set, not ask you to conform to theirs.

“The moment that a business coach pushes you to do something that is really not compatible with your personality or your beliefs or values,” Sunwoo says, “that’s a huge problem.”

How to find the right coach — maybe for free

Here’s how to find a coach that will be as helpful as possible.

Determine whether you need advice or to hire someone. A coach isn’t the right fit for every business owner. If you need hands-on help organizing your business finances, for instance, you may need a bookkeeping service or accountant. And take legal questions to an attorney.

Seek out the right expertise. A good coach should be aware of what they don’t know. If they’re not a good fit for your needs — whether that’s expertise in a particular industry or a specialized skill set, like marketing — they might be able to refer you to someone who’s a better fit.

Consider free options. There may be some in your city or region:

  • SCORE offers free in-person and virtual mentoring in all 50 states, plus Guam, Puerto Rico and other U.S. territories.

  • See if your city has a Small Business Development Center, Veterans Business Outreach Center or a Women’s Business Center. All are funded by the U.S. Small Business Administration and offer free training and advising for entrepreneurs.

  • Do an online search for city- or state-specific programs. Philadelphia, for example, offers a business coaching program designed for entrepreneurs who want to qualify for particular business loan programs. Business incubators often offer courses or coaching.

Make sure your coach is invested in you. They should take the time to learn about you, your business and its unique needs, then leverage their own experiences and creativity to help you.

“I’m on your team now,” Robinson says of his clients. “Let’s do this together and make this a success.”


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Starting A Business

Are There SBA Loans for the Self-Employed?



Many of the same SBA loans are available to both self-employed people and more formally structured businesses, such as limited liability companies and corporations. However, self-employed individuals, like sole proprietors and independent contractors, might face a higher barrier to entry for having limited credit history, inconsistent revenue or no collateral. If they can’t qualify for an SBA loan, other business financing options are available.

Who qualifies as self-employed?

Sole proprietors, independent contractors and partnerships all fall under the self-employed category. In these cases, there is no legal distinction between the business owner and the business itself. Sole proprietors, for example, are solely responsible for their business’s gains and losses, while LLCs and corporations are legally distinct from their owners. This distinction helps protect the owners’ personal assets if their business runs into legal or financial issues.

Are self-employed SBA loans hard to get?

While a sole proprietorship is much easier to set up than an LLC or corporation, lenders may be more hesitant to finance them for a few reasons:

  • Self-employed business owners are legally responsible, as individuals, for any debt and liabilities that their businesses take on. If someone sues their business, for instance, their personal assets — not just their business — could be at stake. This makes it riskier for lenders to finance them.

  • Sole proprietorships and independent contracting businesses may have lower revenue or less collateral to offer since they’re often a business of one. This could make it more difficult for them to prove that they can pay back the loan, plus interest. And it may require more paperwork.

  • Some banks set lending minimums that surpass what a self-employed business owner is looking for, either because the business owner doesn’t need that much funding or doesn’t qualify for it.

  • Since there is no legal distinction between the self-employed business owner and their business, they may lack business credit history. To establish business credit, you’ll want to register the business, obtain an employer identification number and open a separate business bank account and credit card to keep your business and personal finances separate.

SBA loans for the self-employed

SBA microloan: Best for small loans and more lenient requirements

Applying for an SBA microloan is a great option for self-employed business owners, especially if they’ve been turned down by traditional banks and don’t need more than $50,000 in funding. In fact, the average SBA microloan is around $13,000, according to the SBA. SBA microloans are administered by nonprofit, community-based organizations that can also help train applicants in business practices and management. And because the loans are small, the application process may be easier — applicants may have limited credit history and typically don’t need as high of a credit score as they do for an SBA 7(a) loan.

SBA 7(a) small loan: May not require collateral

Funds from the SBA’s most popular 7(a) lending program can be used for a variety of business-related purposes, such as working capital or purchasing equipment. While the maximum SBA 7(a) loan amount is $5 million, SBA 7(a) small loan amounts don’t exceed $350,000. And if the 7(a) small loan is for $25,000 or less, the SBA doesn’t require lenders to take collateral.

SBA Express loan: Best for quicker application process

SBA Express loans are a type of 7(a) loan for businesses that need quick financing and no more than $500,000. The SBA responds to these loan applications within 36 hours as opposed to the standard five to 10 days, which may speed up the process for borrowers working with non-SBA-delegated lenders. Additionally, borrowers might not have to fill out as much paperwork — the SBA only requires Form 1919. Beyond that, lenders use their own forms and procedures.

SBA loan alternatives

Online lenders

Self-employed business owners turned down for SBA or traditional bank loans may be able to qualify for financing with an online lender. These lenders offer options such as term loans and lines of credit, and they often process applications faster and have more lenient requirements. However, applicants should expect to pay significantly more in interest than they would with an SBA loan.

Business credit cards

Not only can business credit cards help build your business credit history and pay for everyday business purchases, but they can also help finance larger purchases (within your approved credit limit). And if you qualify for a credit card with a 0% introductory APR offer, you’ll have multiple months to pay off the balance interest-free. Just make sure you’re able to pay off your purchase before the intro offer ends and a variable APR sets in.


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