Roofers have one of the most dangerous jobs in the U.S. Accidents aren’t the only concern if you own a roofing business. You also have to worry about problems such as lost income from work interruptions, damaged equipment and claims about shoddy workmanship.
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What Does Roofing Insurance Cover?
A roofing insurance policy contains several types of small business insurance to cover a wide array of problems. These issues include workplace injuries, damage to your business property and lawsuits from clients who claim your work is poor or incomplete (even if the claim is without merit).
A good place to start for roofing insurance is a business owners policy (BOP). A BOP bundles three important coverage types, and it’s usually cheaper than buying each coverage type separately.
1. Business liability insurance
This covers property damage and bodily injuries caused to others (not including your workers). For example, if a customer trips over your work equipment and gets hurt, your general liability insurance would pay for medical expenses, court judgments, settlements and legal defense costs.
2. Commercial property insurance
This covers the physical location of your business and equipment if they’re damaged due to a covered problem like a fire. Both leased and owned equipment is covered by commercial property insurance, including tools, inventory, business records, valuable papers, computers and office furniture.
3. Business interruption insurance
If you have to temporarily shut down work because of a problem covered by your policy, such as a fire or theft, business interruption insurance replaces lost income. This also handles lost income due to damaged merchandise and the cost of moving your business to a new location on a temporary basis.
What’s Not Covered by Roofing Insurance?
Common exclusions that aren’t typically covered by roofing insurance include:
- Earthquakes (you will need a separate earthquake insurance policy)
- Floods (you will need a separate flood insurance policy)
- Infectious diseases
- War
- Radioactive fallouts
- Government seizures
- Intentional and fraudulent acts
- Wrongful termination (unless you have employment practices liability insurance)
8 Types of Insurance for Roofers to Consider
While a BOP is a solid start to a roofing insurance policy, you will want to build on it with additional coverage types. Speak with your insurance agent to discuss the types of insurance that will meet your business needs, such as the following.
1. Workers compensation insurance
Workers compensation insurance is required in most states, even if you have just one employee. It covers medical expenses, disability benefits and lost wages if your employees become injured or ill due to job-related tasks.
For example, if your employee falls off a ladder, workers comp insurance would cover their hospital bills and lost wages while they recover.
2. Commercial auto insurance
You need commercial auto insurance if you own a vehicle for your roofing business, such as transporting shingles to a job site. Your personal car insurance won’t cover business use.
Here are some examples of business use of a vehicle:
- To haul tools and equipment in your vehicle.
- To transport goods or people in your vehicle for work purposes.
- An employee drives your vehicle.
- The vehicle is owned by your company.
- The vehicle is solely used for work.
- You conduct a business service with your vehicle like picking up and delivering roofing materials.
Here are common commercial auto insurance coverage types:
- Bodily injury liability. This covers injuries accidentally caused to others by you or your employee.
- Property damage liability. This covers property damage accidentally caused to others by you or your employees. For example, you accidentally crash into your client’s fence.
- Combined single limit (CSL). This combines one overall limit for bodily injury and property damage claims against you instead of two separate limits.
- Collision insurance. This pays to repair or replace your vehicle if you or your employees get into a car accident.
- Comprehensive insurance. This pays to repair or replace your vehicle if it’s stolen or damaged from problems like flood, fire, falling objects or vandalism.
- Uninsured motorist (UM) coverage. This covers injuries to you and your passengers if you’re hit by someone who doesn’t have car insurance or enough car insurance to cover your medical expenses. In some states, you can also buy UM to cover damage to your car if an uninsured driver hits it.
3. Hired & non-owned auto insurance
If you or your workers use a rented vehicle or personal vehicle for business use, this covers property damage and injuries accidentally caused to others. For example, if your employee gets into a car accident while driving a rented vehicle to a job site, this would cover damage to the other driver’s car.
4. Contractor’s tools and equipment insurance
This covers the cost to repair and replace your tools and equipment if they’re damaged, lost or stolen, such as an air compressor from a job site. This coverage may have limitations. For example, Insureon limits this coverage to small tools, mobile equipment and equipment less than five years old. This type of coverage is also called “equipment floater insurance.”
5. Equipment breakdown insurance
If you rely on certain types of tools and machinery to complete roofing projects (such as an air compressor), this covers the cost to replace and repair the equipment due to unexpected breakdowns. It doesn’t cover normal wear and tear.
6. Errors and omissions insurance
Errors and omissions insurance is also known as professional liability insurance. This covers the costs associated with a lawsuit if a client accuses you of not completing the job or shoddy work, even if the accusation has no merit. For example, if a client accuses you of doing a poor job repairing a damaged roof, this insurance type could pay for your legal defense, settlements and legal judgments.
7. Commercial umbrella insurance
If you want an extra layer of protection beyond general liability insurance, look into a commercial umbrella insurance policy. For example, if your roofing business is sued for $1.2 million and your general liability limits are $1 million, umbrella insurance could cover the $200,000 shortfall.
8. Surety bond
You may be required to have a surety bond to get a permit or business license. A surety bond covers the costs of claims about incomplete and poor workmanship, in addition to fraud and theft.
For example, if a client believes your roofing work is poor or insufficient, the client can file a claim with the surety for the cost of hiring another roofing contractor to re-do and complete the work.
Examples of Roofing Insurance Claims
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How Much Does Roofing Insurance Cost?
Here are examples of how much roofing insurance might cost. Your rates will vary depending on how much coverage you purchase and other pricing factors.
The cost of roofing insurance depends on several factors, including:
- Number of employees. You can expect higher workers compensation insurance costs with more workers.
- Insurance coverage needs. The coverage types you buy and your policy limits factor into your premium costs. Generally, the more coverage you buy, the more you can expect to pay.
- Prior claims history. Your insurer will likely factor your previous business claims history into your rates.
- Other pricing factors. Your business assets, the amount of business property you own, your business location and the size of your payroll are examples of pricing factors that affect your rates.
Ways to Save on Roofing Insurance
Here are some tips to save on roofing insurance:
- Compare roofing insurance quotes. Not all insurers price their roofing insurance policies the same, which is why it’s a good idea to get quotes from multiple small business insurers.
- Buy a business owner’s policy. A BOP is a way to save on three essential coverage types: general liability insurance, commercial property insurance and business interruption insurance. You usually pay more if you buy these coverage types separately.
- Classify your workers accurately. Make sure you have an accurate and detailed description of your workers’ duties and don’t have them perform duties outside their classification. This can help you save on workers comp insurance. Your business insurance agent can help you classify your workers.
- Implement a safety program. You may be eligible for savings if your roofing business implements and documents an employee safety program.
- Join an industry or trade association. You may qualify for a group rate on workers compensation insurance by joining a trade association.
- Pay your premium upfront. You can often get a discount if you pay your roofing insurance premium annually rather than monthly.
- Increase your commercial car insurance deductible. Generally, you pay less for coverage when you have a higher deductible. The insurance deductible is the amount that gets deducted from an insurance claims check. Be sure you can cover a higher amount if you go this route.
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Roofing Insurance FAQs
Do you need roofing insurance?
Some types of small business insurance are required by law, depending on your state. If you have employees, you most likely need workers compensation insurance.
Even if you’re a roofer with no employees, going without roofing insurance could be a major mistake. For example, your small business could suffer serious financial consequences if you accidentally damage someone else’s property or are sued for poor workmanship. It’s worth considering a business owners policy to cover problems like accidents, lawsuits and lost income.
Does a roofer need commercial auto insurance
You need commercial auto insurance if you’re using a vehicle for your business. For example, if you transport your tools or materials (such as shingles) to a job site. Your personal car insurance policy won’t cover business use.
Which types of insurance for roofers are required by law?
Workers compensation insurance is required in most states. Workers comp can be purchased even if you don’t have employees. Workers compensation coverage can help sole proprietors with work-related injuries that health insurance may not cover.
Workers compensation insurance programs, requirements and how to buy coverage differs by state. Some states have state-run agencies, while others allow you to buy from a private insurance company. Private companies set their own prices and can reject customers.
You may also be required to have a surety bond, which covers claims costs related to incomplete or poor workmanship, theft or fraud. Surety bonds are sometimes required to get a permit or business license.
