The 5 Most Common Commercial Insurance Gaps Contractors Overlook—And How to Avoid Them

As a contractor, you work hard to protect your business—but even with insurance in place, there are often critical gaps that go unnoticed until a claim is denied. Here are five of the most common coverage gaps we see with small to mid-size contractors—and how we help our clients avoid them.

1. Subcontractor Liability Exclusions Many general liability policies exclude coverage for work done by subcontractors, especially if those subs don’t carry their own insurance. If a subcontractor causes property damage or injury and you can’t provide proof of their insurance, you could be on the hook. We help ensure all subs are properly vetted and your policy is structured to respond if things go wrong.

2. Misclassified Workers' Comp Employees Improperly classifying workers—such as listing a roofer as a general laborer—can result in denied claims or costly audits. In some cases, owners think 1099 workers or casual laborers don’t need to be covered, but that’s a big mistake. We work with contractors to properly classify employees and subcontractors so you're compliant and protected.

3. No Tools & Equipment Coverage (Inland Marine) Think your tools are covered just because they’re in your truck? Think again. Most commercial auto and property policies don’t cover mobile tools or equipment. This is where Inland Marine coverage comes in—it protects your tools whether they’re on a job site, in transit, or in storage. We make sure your gear is insured wherever your work takes you.

4. Missing Business Income / Actual Loss Sustained If your shop or office is damaged and you can’t operate, who pays your bills while you rebuild? Without business income coverage or the Actual Loss Sustained endorsement, your policy might only cover physical damage—not lost revenue. We make sure your policy includes this vital coverage so you can keep your business afloat during downtime.

5. Snow Plow or Seasonal Work Exclusions Many contractors pick up snow plowing in the winter—but don't realize that many general liability policies exclude it outright or require special endorsements. Whether it’s snow removal, tree work, or seasonal cleanups, we make sure your coverage matches the actual work you’re doing all year round.

Final Thought: These gaps are easy to miss—but costly to ignore. That’s why we take a hands-on approach to reviewing and customizing your insurance to fit your business. If you're not 100% sure you're fully covered, let’s schedule a quick review. It could save your business from a big headache down the line.