The risks and challenges that come with being a contractor in Colorado demand a specialized kind of insurance to protect all the bases—literally and figuratively. Because we know the nature of contracting, we know that the kinds of risks you face vary not just from day to day but also from site to site. If you want to work with the kind of freedom that contracting theoretically affords, carrying an insurance policy that covers all angles is a must.

What Risks Do Colorado Contractors Face?

There are many construction site risks, including the possibility of harmful accidents to workers, damage to property, and even environmental disasters. These dangers are compounded by inclement weather, inadequate safety equipment, and various state and federal legal requirements.

Knowledge of these risks is crucial not only for obtaining the best contractor insurance but also for developing and executing good safety strategies that protect both the contractor and the project. Colorado contractors work in a relatively safe, if varied, environment and do not face the extraordinary risks characteristic of some other states. Yet they still need environmental insurance and business liability insurance for construction contractors to protect them from risks both at fault and not at fault.

• Residential Projects: Residential projects present risks, such as property damage, injury to homeowners or visitors, and problems with subcontractors. Defective materials, delays, design risks, and even moving objects are other risks facing contractors.
• Commercial Projects: Here, contractors face risks that are typically more complex and involve more claimants because commercial projects are larger.
• Industrial Sites: Industrial sites are high-risk, especially with heavy machinery and more regulations than smaller residential projects. The risks include exposure to hazardous substances, falls, burns, electric shocks, vehicle accidents, etc.
• Environmental Risks: Colorado’s climate and geography make contracting safety requirements more complex due to heavy snowfall and summer wildfires. The weather is unpredictable and can cause delays and logistic challenges, ruin materials, and increase safety risks for site workers. These potential liabilities are a source of worry for contractors.
• Consumer Protection Legislation: Compliance with Colorado’s consumer protection laws can increase regulatory burdens and liabilities for contractors. The financial risk of these laws may overwhelm contractors who do not have expensive insurance coverage.

Because of these challenges, all contractors working in Colorado and beyond need specialized insurance. Why? Because the way business works today demands that contractors take a really proactive approach to risk and loss management. One of the main tools that contractors can use to achieve this is specialized insurance.

How Specialized Contractor Insurance Works

Insurance for contractors in Colorado is specialized. That’s because the risks contractors face in Colorado—thanks to our unique geography, weather, and myriad other factors—are anything but run-of-the-mill. It would be impossible to cover all those risks with a single policy. Landscapers, roofers, painters, HVAC contractors, plumbing contractors, electricians, carpenters, general contractors, concrete and tilers, and other contractors can be covered by a bespoke insurance policy.
Liability coverage is also extended to hires from outside the company, like architects, engineers, and designers. If they make a mistake while on the job and it leads to a problem, they—and we—are protected.

Types of Specialized Insurance for Contractors

Contractors have various kinds of insurance depending on the sort of work they do and the level of risk they assume.

General Liability insurance

The GL is a sweeping insurance policy that protects your business from lawsuits resulting from bodily injury and property damage. It also covers you in the event of an “advertising injury,” which means that if you say something false about a competitor or another entity and that entity sues you and wins, your GL will cover the award. This is very similar to what the general liability insurance policy covers for construction businesses.

Commercial Property Insurance

You will need commercial property insurance if your business or the property you’re working on suffers a loss or damage for which you’re liable. In 2023, businesses in the US lost $9 billion to damages incurred from extreme weather and climate change conditions. Most of that sum was covered by commercial property insurance, which helps businesses regain footing after disasters. That layer of protection has saved many businesses from going under after something like a tornado tore through the area or a broken pipe damaged their materials.

Workers’ Compensation Insurance

Different types of skilled workers become involved in on-site accidents and injuries. A contractor could face liability if an on-site injury occurs. However, the workers’ compensation insurance required in Colorado ensures that the contractor is covered if such an event happens. The policy pays injured workers a portion of their lost income while recovering.

Professional Liability insurance and Umbrella Liability insurance

All professionals strive for perfection, but it’s inevitable that you, your employees, or your hires will sometimes make mistakes that affect your work. These professional errors can come from negligence or failure to carry out a task you’re supposed to handle—that is, from making a misstep or from not stepping up when necessary. Errors like these can make you financially liable. But if you have professional liability insurance, you’re carrying a shield that protects you from these potential damages.
Another significant liability coverage type is umbrella liability insurance. It covers claims that exceed the liability limits included in the general, professional, or auto and workers’ liability policies. Umbrella insurance ensures broad coverage. Two other policies to consider are the business owner policy (BOP) and pollution liability insurance, which is critical if construction work is likely to cause environmental damage.

Commercial Auto insurance

Common contracting business risks include damage to your business vehicles and being liable for at-fault accidents. If your vehicles are involved in an accident that results in damage, bodily injuries, or other financial expenses, commercial auto insurance is your safety net. It covers repairs to your vehicles, as well as funeral and medical costs to the injured party and lost wages, if necessary. It also covers accidents caused by drivers who don’t carry enough insurance or any at all.

Benefits of Specialized Insurance

Being a contractor in Colorado means having a specialized kind of insurance policy. This is because the unique nature of the work—along with the state’s geophysical hazards and regulatory environment—demands a coverage that effectively addresses far-ranging risks. With the right kind of insurance, you can operate in different counties throughout the state and enjoy the peace of mind that comes with knowing your business is covered against everything from normal accidents to extreme events like a construction site turning into an avalanche zone.

How Riverbend Insurance Helps

Riverbend Insurance can help you secure the ideal coverage for your business. We are a Colorado firm and understand the kinds of insurance that our fellow Centennial State citizens require. We know how to tailor policies to the unique needs of businesses like yours. Whether you’re in HVAC, painting, electrical work, plumbing, or any other niche, our underwriters will find the best policy for you. They’ll do this through something called “comprehensive solutions,” which is a fancy way of saying that they’ll think long and hard about the best and most efficient way to keep your business covered.