What Does “Fully Insured” Really Mean?

If you’ve ever driven past a contractor’s van or truck, you’ve likely seen the phrase “Fully Insured” proudly displayed on the back. But what does that actually mean? If you’re a contractor—or someone looking to hire one—you need to understand exactly what being “fully insured” should include.

1. General Liability Insurance

At a minimum, a contractor should have at least $1 million in general liability insurance. This protects against third-party property damage or bodily injury claims that could occur on the job.

2. Workers’ Compensation Insurance

If a contractor has employees, they must carry workers’ compensation insurance to cover medical expenses and lost wages in case of a work-related injury. Without it, you could be held liable if someone gets hurt on your property.

3. Commercial Auto Insurance

A standard personal auto policy doesn’t cover vehicles used for business purposes. That’s why contractors should have at least $1 million in commercial auto insurance to protect against accidents involving their work vehicles.

4. Surety Bonds

Certain trades require bonds to ensure that work is completed properly. For example, in New Jersey, a home improvement contractor bond is mandatory for professionals in that industry.

5. Contractors Professional Liability (Bonus)

Mistakes happen—even to the best professionals. That’s why it’s a major plus if a contractor carries contractors professional liability insurance (E&O – Errors & Omissions). This covers claims related to professional mistakes, negligence, or faulty work.

Do Your Due Diligence

Not all “fully insured” contractors are truly covered in every area. Before hiring, always request proof of insurance and verify coverage. Ensuring that “fully insured” actually means fully protected can save you from unexpected liabilities and financial headaches.

Get a Quote from LG Insurance Agency Today!

Whether you’re a contractor looking for comprehensive coverage or a business owner needing to protect your operations, LG Insurance Agency has you covered. We specialize in commercial insurance solutions to keep you protected and compliant.

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Don’t wait until it’s too late—make sure you’re fully insured with the right coverage!