Getting your Idaho Contractor license is a significant milestone in your career, opening the door to a wealth of opportunities in the construction industry. Whether you’re planning to start your own business or join an established firm, this license is your ticket to taking on projects that can shape the landscape of Idaho.
But now that you’ve got your license, you might wonder, “What’s next?”
Starting a contracting business involves more than just picking up your tools and getting to work. You need to take crucial steps to ensure your business is legally compliant and protected from the unexpected with adequate commercial insurance.
Did You Know? Idaho requires all contractors to be licensed with the Idaho Contractors Board unless they are employees or companies working on projects under $2,000. Specialty contractors must register for a license with the Division of Occupational and Professional Licenses.
Before diving into the coverages you need, review new construction compliance regulations for the projects you wish to work on in Idaho. According to Jason Viechnicki, an Idaho territory sales manager at Central Insurance, reviewing the legal obligations that come with your Idaho contractor License is the first step towards getting to work.
From there, insurance is one of the most important aspects to consider. As a newly licensed contractor, understanding the various types of insurance you’ll need—and why they’re essential—can make all the difference in safeguarding your business. In this guide, we’ll walk you through the key actions you should take after receiving your Idaho contractor license and the importance of securing the right insurance to protect the future of your business.
Understand the Legal Obligations for Your Idaho Contractor License
Securing your Idaho contractor license is just the beginning. You’ll need to stay on top of ongoing requirements to operate legally. Idaho requires contractors to renew their licenses periodically. This may involve paying renewal fees and providing proof of continued compliance with state regulations. Failing to renew your license on time can result in penalties or even suspension, putting your business at risk.
Stay up to date: The Idaho Contractors Board is a great resource for staying aware of state requirements.
Obtaining the appropriate permits for each project you undertake is also essential. Idaho has specific permitting requirements that vary depending on the type and scope of the work. Operating without the necessary permits can lead to fines, project delays, and potential legal issues. Whether you’re building a new home, remodeling a commercial space, or performing specialized installations, the correct permits are crucial for ensuring your work is compliant with state and local laws.
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Insurance is Crucial in Protecting an Idaho Contractor License
The construction industry is inherently risky, with hazards ranging from property damage to workplace injuries and even legal disputes. Without proper insurance coverage, you’re exposed to significant financial losses that could jeopardize your business and personal assets.
Aside from being a legal requirement for your licensure, having the right insurance coverage protects you from shouldering the financial burden of unexpected events like job site accidents or client lawsuits. It also boosts your credibility with clients, making them more likely to trust you with their projects when they know you’re properly insured. Plus, it’s a legal requirement for your licensure.
“A new contractor should find out what types of insurance requirements are mandated for their license and review any new contracts with their independent insurance agent,” Viechnicki explains. “The contract information will determine if they have sufficient insurance limits for each project. This way, certificates of insurance can be issued, and the contractor can get paid in a timely manner.”
Below are six of the top insurance coverages you need, according to Viechnicki:
1. General Liability Insurance
Viechnicki stresses that general liability insurance is a must for every contractor, as the state requires it at registration. They will ask for your certificate of insurance, which must have a minimum coverage of $300,000. It provides coverage for third-party claims of bodily injury, property damage, and personal injury.
Several types of claims may be covered under a general liability insurance policy:
- Bodily injury: This coverage helps to pay for medical expenses, lost wages, and other damages if someone is injured while on a contractor’s job site.
- Property damage: Coverage for damages to third-party property caused by a contractor’s work or operations.
- Personal and advertising injury: This coverage helps to pay for damages resulting from defamation, libel, slander, or other types of personal injury.
For Example: Imagine your client gets injured by your equipment while you’re working on a masonry job at their home. General liability insurance may cover the associated costs, including medical expenses and legal fees. Without this coverage, a single incident could result in a costly lawsuit that could devastate your business.
Although $300,000 is the minimum required to obtain your license, you should consider a higher coverage amount if your work demands it. Larger construction projects that require additional workers and materials should opt for more coverage. If you are expecting to work on projects of various sizes, consider an umbrella policy on top of your general liability policy. That way, you can increase your coverage for the time you’re working on an unusually large project.
2. Workers’ Compensation Insurance
If you have employees, Workers’ Compensation insurance is mandatory in Idaho. This insurance covers medical expenses and lost wages for employees injured on the job. It also protects your business from lawsuits related to workplace injuries. Viechnicki emphasizes that even if you have a small crew, Workers’ Compensation is essential, as workplace injuries are common in construction, and the costs can be substantial.
Did You Know? Falls are the leading cause of death and injury in construction accidents. OSHA explains that a fall hazard is anything on a worksite that might make someone lose their balance or support. Safe worksites, with proper housekeeping and employee training, will always be your first line of defense against Worker’s Compensation claims. Loss control measures are a great option for combating high-risk work environments.
3. Commercial Auto Insurance
Contractors often rely on vehicles to transport tools, materials, and crew members to job sites. Commercial auto insurance helps protect against accidents or damage when on the job or transporting materials, tools, and equipment to and from the job site. Personal auto insurance policies typically do not cover vehicles used for business activities. That’s why it’s important to have commercial auto insurance to avoid gaps in coverage.
| Type of Auto Accident | Idaho Auto Insurance Coverage Minimum | National Average Cost of Auto Accidents |
| Property Damage | $5,700 | $15,000 |
| Bodily Injury | $25,000 (per person) $50,000 (per accident) |
Possible injury: $24,000 Evident injury: $40,000 Disabling injury: $155,000 |
4. Inland Marine Insurance
This insurance specifically covers tools, equipment, and materials while they’re in transit or stored at a job site—situations where standard property insurance typically falls short. Your tools and equipment are the lifeblood of your contracting business. Inland marine insurance ensures protection for your tools and materials, providing a safety net no matter where they are.
For Example: Imagine you’re on a new residential development and have invested in high-end power tools and specialized equipment for the job. One morning, you arrive at the job site only to find that someone has broken into your storage trailer overnight and stolen several pieces of expensive equipment, including a generator and a skid steer loader.
This insurance is crucial for Idaho contractors who work in remote locations with heightened risks like theft, damage, and loss.
5. Professional Liability Insurance
Also known as errors and omissions insurance, Viechnicki recommends this coverage for all contractors. Especially if you offer design, consulting, or other professional services as part of your contracting business. This coverage protects you from claims of negligence, errors, or omissions that result in financial loss for your clients. Even the most experienced contractors can make mistakes. Professional liability insurance helps cover the costs of defending your business in court.
Viechnicki emphasizes that “all contractors need to closely look at any impending project contract and contact their independent agent to ensure they’re correctly covered for that particular job.”
6. Business Owner’s Policy (BOP)
A Business Owner’s Policy (BOP) packages a range of property and liability protection with small business owners’ needs in mind. For example, Central’s BOP offers over 70 coverages. This includes Contractor’s Installation, Contractor’s Tools and Equipment, Cyber Suite, Equipment Breakdown, Employee Practices Liability, and more.
“A Business Owner’s Policy for a contractor can provide potential cost savings compared to insuring each line of coverage individually,” Viechnicki says. “This bundling of coverages can provide discounts and lower premiums for an insured.”
Learn More: How to Customize BOP to Meet Your Business Needs.
Finding the Right Insurance Partner
Choosing the right insurance provider is just as important as selecting the right types of coverage. Here are a few tips to help you find the best provider for your needs:
- Research and Compare: Start by researching and comparing multiple insurance providers specializing in contractor insurance. Look for companies with strong reputations, positive customer reviews, and a deep understanding of the construction industry.
- Working with an Insurance Agent: Consider working with an insurance agent specializing in contractor insurance. An experienced agent can help you assess your specific risks, recommend appropriate coverage, and navigate the complexities of insurance policies. They can also ensure you’re not underinsured or overpaying for unnecessary coverage.
Partnering With Central Insurance
Central Insurance provides extensive resources and specialized knowledge for policyholders in the construction industry. When it comes to handling insurance claims, policyholders have access to Central’s construction experts. Thanks to their hands-on experience, they are well-versed in industry trends and challenges.
For example, Central’s construction underwriting specialist, Matt Sbordone, combines his technical skills with a focus on building strong relationships. Given the high-risk nature of the construction industry—with hazardous job sites and potentially costly claims—Sbordone works with Central’s Construction Underwriting team to collaborate closely with policyholders and offer expert insurance support and tailored solutions.
Jim Johnson, Central’s dedicated loss control construction specialist, works hand-in-hand with construction clients to assess job site risks and prevent potential losses. His leadership guides a team committed to helping policyholders reduce claim deductible costs and enhance overall site safety. By improving workplace safety, Johnson also helps safeguard the employees of Central’s policyholders.
“Central’s largest and fastest growing product is construction, and we have a very deep knowledge base in this area. We have an excellent track record of assisting contractors with coverages, loss control, claims, and audits. This has created an excellent partnership that has added tremendous value to the contractors we insure. When a new contractor is correctly protected, we allow them to grow at the pace they want.” – Jason Viechnicki.
At Central, supporting our policyholders by preventing losses is a key part of our promise to care for those who trust us. Loss control specialists collaborate with policyholders to develop customized plans, provide on-site training and hazard assessments. They remain fully committed to ensuring the safety of your business.
