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Protecting Iowa's Paper Contractors, One Project at a Time
Anybody who runs a construction or contracting business throughout Iowa whether it’s in Des Moines, Cedar Rapids, Davenport or Sioux City and who carries out all of their work through subcontractors rather than employing people directly would be regarded as a so-called paper contractor. You are responsible for managing the client, the contract and the project schedule, while the subcontractors carry out the actual work. This approach does provide a certain degree of flexibility, but it also gives rise to a particular insurance problem in that you can be made liable for any mistake, injury or uninsured claim made by a subcontractor even though you didn’t carry out the work yourself. Iowa Contractors Insurance provides affordable and appropriately sized insurance for paper contractors in Iowa, enabling you to run your projects with confidence rather than having to worry about what will happen if one of your subcontractors causes a claim.
Call the number 952-222-8073 to get a free, unconditional quote.
Why Paper Contractors in Iowa Need Specialized Coverage
Standard business insurance usually does not take into account the special risks that paper contractors have to deal with even when another person’s team is carrying out the work, your name will still appear on the contract, the permit, and often on the certificate of insurance. In Iowa, both the courts and clients generally make the general contractor who is listed on the contract responsible for the entire project, so if a subcontractor is injured, makes a mistake, or causes property damage, that can become your liability. The construction industry in Iowa is still expanding in areas such as Des Moines–West Des Moines, the Cedar Rapids/Iowa City area, and the Quad Cities, and an increasing number of contractors are using a subcontractor-based approach in order to grow without having to cover the costs of direct employees. Nowadays many property owners, developers, and lenders require the contractor of record to have sufficient insurance no matter how the labour is arranged. If you don’t have the right kind of coverage, a mistake by an uninsured or underinsured subcontractor could result in a claim being made against your business a claim that you never actually dealt with physically.
Types of Insurance Every Iowa Paper Contractor Should Know About
General Liability Insurance
In Iowa, this is what forms the basis of a paper contractor’s insurance policy. The general liability coverage includes compensation for third-party bodily injury and property damage that are connected with the project such as in numerous instances the work carried out by your subcontractors. Generally speaking, most property owners, developers, and municipalities in Iowa require the contractor named on the contract to keep their general liability insurance in full force, no matter who is actually carrying out the work.
Subcontractor Default Insurance / Contingent Liability Coverage
Since your business model is completely based on using subcontractors, it is essential to verify that your policy covers any exposure relating to subcontractors. This would involve obtaining contingent liability coverage, which will help protect you in the event that a subcontractor’s negligence results in a claim, and coverage for the situation where a subcontractor defaults, leaves a job, or is found to be uninsured.
Workers’ Compensation Insurance
Even without having direct employees, Iowa law and a large number of contracts obligate you to verify that each subcontractor has their own workers’ compensation insurance and in certain cases you might be required to have your own policy if it is later found that a subcontractor has been misclassified. Requiring and checking that each subcontractor you hire has workers’ comp is one of the most important risk management measures that a paper contractor can adopt.
Certificate of Insurance Tracking and Additional Insured Requirements
Your risk depends entirely on whether your subcontractors actually have insurance not just on the fact that they claim to. By asking for up-to-date certificates of insurance from each subcontractor and putting your name on their insurance policies as an additional insured, you make it certain that if a subcontractor causes a claim, it will be their insurance that pays first rather than yours.
Professional Liability / Errors & Omissions Insurance
Should your responsibilities involve project management, scheduling, or coordination, an error in this area not in the actual work might result in financial loss on the part of the client. Insurance for professional liability helps to cover claims resulting from mistakes in project management, apart from those relating to physical injury or damage to property.
Umbrella Insurance
An umbrella policy goes beyond the liability coverage of your general liability policy and offers important additional protection since a large part of your risk involves subcontractors that you do not supervise on a day-to-day basis.
How much does paper contractor's insurance cost in Iowa?
The price you’re charged will depend on your annual revenue, the number and kind of subcontractors you regularly use, your claims record, and the care with which you check your subcontractors’ insurance. Contractors who have strong practices in vetting their subcontractors and keeping proper documentation tend to receive better rates, since insurers see this kind of discipline as a way of lowering the overall risk. The only way to find out your real cost is to obtain a tailored quote taking into account your particular operations. Combining general liability with contingent liability and umbrella coverage usually results in more thorough protection and can make the renewal process simpler.
Serving Paper Contractors Across Iowa
We provide assistance to construction managers, project coordinators, and contractors who work on a subcontractor-based basis all over Iowa, such as in Des Moines, Cedar Rapids, Davenport, Sioux City, Iowa City, Waterloo, Council Bluffs, Ames, West Des Moines, and Dubuque, as well as in the smaller towns throughout the state. If you run a small business that co-ordinates a few reliable subcontractors or if you are a bigger company managing multiple subcontractor teams on a number of ongoing projects, we adjust our coverage to fit your particular business model not using a one-size-fits-all approach.
What's the advantage of using Iowa contractors' insurance?
- We have local expertise and a good understanding of the construction market in Iowa as well as the particular liability risks associated with a business model based on subcontractors.
- Policies specific to models, with coverage designed to address the actual risks encountered by paper contractors, such as subcontractor default and contingent liability.
- We can provide insurance certificates quickly. If you need one to win a bid or to meet a client’s requirements, we act swiftly.
- Offer competitive, bundled prices. You can get significant savings by combining general liability, contingent liability, and umbrella coverage.
- Straightforward, honest guidance. No jargon. No upselling coverage you don’t need. Just clear answers to your questions.
Do not carry on waiting until a mistake of an uninsured subcontractor has turned into your liability, since a single claim resulting from the sub’s negligence can cost you more than all the premiums you have paid over the years.
Call 952-222-8073 right now to have a free consultation and to obtain a quick, no-obligation quote that’s suitable for your business model. This will ensure that you are properly insured so that you can continue to grow your business throughout Iowa with confidence.
Frequently Asked Questions
In most cases, the answer is yes. Since you are the contractor of record, you can be made responsible for the subcontractor’s negligence, injury, or defective work, especially where the subcontractor is uninsured, underinsured, or the client regards you as ultimately responsible for the project. This is one of the most important risks that a paper contractor should deal with.
It depends on your state requirements and how your subcontractors are classified. If a subcontractor is later determined to have been functioning as an employee, you could face workers’ compensation exposure even without formally hiring anyone. Requiring proof of your subs’ own workers’ comp coverage and confirming proper classification is essential.
That is precisely the situation which contingent liability and subcontractor default coverage are intended to cover. In the absence of such coverage, a claim resulting from an uninsured subcontractor would have to be borne either by your general liability policy or by the assets of your business. One of the best methods of reducing this risk is to check the subcontractor’s insurance certificates before work starts.
Generally, once your policy is active the certificate of insurance can be issued on the same day or within one business day. Should you have a bid coming up or if a client is asking for proof of coverage, please let us know immediately so that we can give priority to sending your COI to them.