Contractor insurance policies are generally issued to cover the contractor, the person or company they are providing services to and any person, such as a homeowner, who is directly impacted by the work of a contractor. The policy will cover accidental property or equipment damage as well as protection from medical and legal costs brought on by a third party.
It’s important to realize that there are two areas that contractor insurance will not cover. The first is deliberate acts of negligence and the second is acts that occur due to a continued pattern of poor workmanship, although documentation and proof of poor workmanship would be needed before denying any claim.
Also important to consider is the length of your policy. Faulty construction is often not evident until long after the work has been completed, so you may not find a claim filed until many years after the job is finished. A good policy will leave you protected even into retirement.