Top Insurance Claims Made by Contractors — And How to Avoid Them

Contractors face a unique mix of physical, financial, and legal risks every day. From the moment you step on a job site, your work, your equipment, and your reputation are all on the line. That’s why having the right insurance coverage is essential—and why understanding the most common contractor insurance claims can help you protect your business (and your bottom line).

Here are some of the top claims we see in the contractor world—and how to avoid them.

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1. Property Damage to a Client’s Home or Business 🏠

One wrong move with a power tool or a dropped piece of equipment, and you could be looking at thousands of dollars in repair costs.
Example: A ladder falls against a customer’s glass storefront during installation, shattering the window.

How to Prevent It:

• Use protective coverings and barriers on-site.

• Keep tools and materials properly secured.

• Train employees on safety and site awareness.

2. Bodily Injury to a Third Party 🚧

Accidents can happen fast—especially in active work zones.
Example: A client trips over extension cords while walking through the job site and suffers a serious injury.

How to Prevent It:

• Maintain clear walkways and secure cords/hoses.

• Use warning signs and barriers when needed.

• Review and follow OSHA site safety standards.

3. Workers’ Compensation Claims 🛠️

From slips and falls to back injuries, construction work is physically demanding and carries a high risk of employee injuries.
Example: A crew member falls off scaffolding and requires surgery and months of rehab.

How to Prevent It:

• Provide regular safety training and PPE (personal protective equipment).

• Enforce fall protection protocols.

• Keep job sites organized and hazard-free.

4. Equipment Theft or Vandalism 🔒

Tools and heavy machinery are expensive—and attractive to thieves.
Example: A contractor leaves a trailer unlocked overnight, and thousands of dollars’ worth of tools are stolen.

How to Prevent It:

• Store tools in locked, secured areas.

• Use GPS tracking for larger equipment.

• Keep detailed inventory records for faster claims processing.

5. Errors in Workmanship (Faulty Work) 📏

Mistakes in construction or installation can result in costly rework and liability claims.
Example: Improper installation of a roof leads to water damage inside the home months later.

How to Prevent It:

• Use written contracts with clear project specs.

• Perform quality control checks during each phase of work.

• Keep detailed documentation and photos of completed work.

6. Auto Accidents Involving Company Vehicles 🚐

Contractors often spend a lot of time on the road moving between sites.
Example: A company truck is involved in a collision on the way to a job, damaging both vehicles and injuring another driver.

How to Prevent It:

• Enforce safe driving policies.

• Keep vehicles maintained and inspected regularly.

• Ensure all drivers are properly licensed and trained.

Why the Right Insurance Matters

Contractor insurance isn’t just a box to check—it’s your safety net when the unexpected happens. Without it, even a small claim could cause serious financial strain or shut your business down entirely.

At LG Insurance Agency, we work with contractors of all sizes to ensure you’re covered for the real risks you face—from general liability and workers’ comp to commercial auto, inland marine, and professional liability coverage.

📞 Protect Your Contracting Business Today
Don’t wait for a claim to find out you’re underinsured. Contact LG Insurance Agency for a free contractor insurance review and quote—we’ll make sure you’re protected so you can focus on building.