As the construction industry begins to recover, along with recent storms across the nation, working outside your normal geographic market may seem like a good option, but it can also bring a number of legal and financial risks.
Companies branching out across state lines need do their research on contractors business insurance before it's too late to act.
Unfortunately, you cannot have the same expectations state to state on how coverage applies. It's become a major challenge in the construction industry, and one area that you have to understand before you go into another state — if that state has a different interpretation of what business insurance should cover versus the last one.
Typically, insurers underwrite each state individually. Not only can specific laws differ, but courts also can interpret those laws in different ways. From an insurance perspective, over-communicating with a broker or insurer before even making a bid is much better than finding yourself in trouble later.
It is strongly recommend that you use many resources around you to gather information and conduct research about operating in a new geographic location, especially one that's in a different state. The financial result of a mistake could be expensive. Arm yourself with knowledge and avoid learning by experience.
Contractors usually make mistakes in the same areas: lien and bond laws, contractor licensing requirements, organized labor issues, local government requirements, unauthorized practice of law and indemnity.
For information on your construction or contractor insurance policies, contact TriState Business Insurance.