2014

Policies: Small Business Insurance for House Painters and Exterior Painting Companies

It would be nice if you could just purchase one small business insurance policy and be done with it. Unfortunately, business insurance for house painters isn't that simple. You'll need a combination of different policies to cover your liabilities and protect you from the costs of a lawsuit.

To cover your business, you may need a combination of the following policies.

General Liability Insurance for Painting Contractors and Home Painting Businesses

General Liability Insurance can cover your painting business when third parties sue you after they…

  • Injure themselves on your equipment.
  • Claim your business damaged their property.
  • Allege your business has harmed their reputation or caused an advertising injury.
  • Accuse your business of copyright or trademark infringement.

Third parties like your customers, clients, subcontractors, vendors, and other non-employees may sue your business over personal injuries, damaged property, and other common liabilities. When they do, General Liability Insurance can pay for many aspects of a comprehensive legal defense. This insurance can cover…

  • Lawyer / paralegal costs.
  • Evidence and witness fees.
  • Judgments awarding damages to the plaintiff.
  • Settlements to prevent the lawsuit from going to court.

Here's how this might work for your business. Your home painting company has just finished repainting the exterior of a client's house. After a large rainstorm, one of the client's windows starts leaking. They claim you business damaged the window while it was repainting the surrounding woodwork. You don't know how this is possible, but the leak has caused substantial damage to their walls and flooring.

The lawsuit might be unjust and its claims inaccurate. Probably, your business did nothing to damage the window.But you'll still have to defend yourself in court and / or pay for the damages.

General Liability Insurance can pay for your legal defense against wrongful lawsuits as well as ones where your business was actually responsible. Sometimes it might be easier to settle with your client. In these situations, GLI can also pay for settlements to prevent the case from going to court.

General Liability Insurance is one of the most fundamental and important insurance coverages for small businesses because it covers you from such a wide array of lawsuits, any of which could end up costing your business thousands and thousands of dollars.

Property Insurance for Exterior Paint Businesses

Property Insurance reimburses your painting business when its painting tools, equipment, offices, supplies, inventory, or other commercial property are damaged by a covered claim.

Property Insurance can help your exterior painting business rebuild when…

  • Your offices or workspace burn down in a fire.
  • Your equipment, painting tools, air compressor, paint sprayers, or other supplies are stolen.
  • An act of vandalism destroys or damages your building or offices.
  • Certain types of weather events (including winter storms and smaller storms) damage your offices.

Natural disasters and named storms (ones the Weather Service gives a first name to) are often not included in Property Insurance. Though they don't come standard, you can often buy coverage for floods, hurricanes, or other weather events and add these to your policy.

Property Insurance can reimburse your business for the lost value of your property. In other words, it will cut your business a check when a fire burns down your offices, paying for the lost equipment, supplies, and other property as well as paying you for the damaged done to your building / office.

Some small-business owners operate painting companies from their homes. If your business is home-based, you may still need commercial Property Insurance to cover your commercial property. For a visual breakdown of the difference between Homeowner's Coverage and commercial Property Insurance, look at our infographic.

Business Owner's Policies for Exterior Painters

Many painting contractors need to purchase General Liability Insurance and Property Insurance because of state laws or clauses in their contracts. These two basic insurance policies are sometimes packaged together in what's called a Business Owner's Policy (also called BOPs).

Business Owner's Policies provide GLI and PI, often at a lower price. How do you qualify?

Insurers only sell BOPs to small businesses that don't need some of the higher-levels of business insurance. Your business may qualify if it…

  • Doesn't have a large office space to insure under a Property Insurance policy.
  • Doesn't work in a "higher-risk" or dangerous industry.
  • Doesn't require more than 12 months of income coverage with Property Insurance policies.

The last stipulation in that list refers to the income insurance you can buy through a Business Interruption Insurance endorsement added to your Property Insurance policy. BII can make payments to your business to replace its normal income when it is forced to shut down by a covered Property event. Storms, fires, and other covered claims can all damage your business to such an extent that it may not be able to run at normal capacity for weeks or months.

If your business needs more than 12 months of income insurance with a Business Interruption Insurance policy, you might not qualify for a BOP.

Cyber Liability Insurance for House Painters and Exterior Painting Companies

Cyber Liability Insurance (also called Data Breach Insurance or Cyber Security Insurance) covers your painting business if its computers are hacked.

Why would a hacker target you? The answer is simple: money. For hackers, your data is money. Your records may contain bank account numbers, SSNs, credit card information, and other data that can help them commit identity theft and steal money from you or your clients.

Cyber Liability Insurance (which may be available as an endorsement to your General Liability policy) protects your business when its own networks are hacked, paying for…

  • Fraud monitoring and credit monitoring for you and your clients in case hackers try to steal their identity.
  • Forensic investigations into who was responsible and how they broke into your network.
  • Crisis management.
  • Communication expenses for contacting clients and other people to notify them of the breach.
  • P.R. / advertising campaigns to rebuild your business's reputation.

Errors and Omissions Coverage for Painting Contractors and Home Painting Businesses

Errors and Omissions Insurance (also called Professional Liability Insurance or E&O Insurance) can cover a painting contractor's professional liability.

Professional liabilities are shortcomings in your work that may lead you to be sued. These include…

  • Mistakes or misjudgments.
  • Failures to deliver the promised goods and services.
  • Paint jobs that peel or wear faster than anticipated.
  • Partial or incomplete work.

Let's say your business paints the exterior of a client's storefront. Unfortunately, the paint starts to wear and chip a year after you complete the job. Likely, this is the paint manufacturer's fault, but your business may still be held liable.

If your client sues you for the unsatisfactory work and claims the poor appearance has affected his sales, your E&O Insurance can pay for the lawsuit.

Workers' Compensation Insurance for Exterior Painting Businesses

To protect your house painting or exterior paint business, Workers' Compensation (also called Workers' Comp or Workman's Comp) can pay for the expenses related to a workplace injury or illness.

As a painting business, you and your employees are often up on ladders and dealing with chemicals. If an employee falls, dislocating their shoulder, your business could be looking at major legal and medical expenses. The same is true if an employee, chipping at an under-layer of older paint, gets ill from lead poisoning.

Workman's Comp can pay for expenses including…

  • Employee wages when they are unable to work after a workplace illness / injury.
  • Medical bills for injured / ill employees.
  • Legal expenses to defend your business from a Workers' Comp lawsuit.
  • Funeral costs.
  • Income for the family of a deceased employee.

Custom-Built Small Business Insurance for House Painters and Exterior Painting Companies

Insureon's agents will custom build an insurance policy to fit your business's needs, liabilities, and concerns about cost.

Submit our online application, and get a free small business insurance quote today.

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