By Dan Burghardt, Owner of Dan Burghardt Insurance
For a quick quote, you can contact our quote department directly at (504) 441-RATE (7283) or complete the Online Quote Request form and you will be contacted ASAP.
Contractors face unique risks every day—on the job site, in the office, and on the road. That’s why contractor insurance isn’t just a formality—it’s a vital piece of protection that keeps a business from being financially wiped out by one bad accident or lawsuit. But even the best insurance policy is only as good as the information supporting it. One simple mistake, and that coverage might not be there when it’s needed most.
After 40 years in the insurance business, and with licenses in both Louisiana and Mississippi, I’ve seen firsthand how certain common errors can leave contractors unprotected. Our agency works closely with contractors in New Orleans, Metairie, Kenner, Gretna, St. Bernard, Slidell, Mandeville, Covington, Baton Rouge, Hammond, Houma, Thibodeaux, LaPlace, Lake Charles, Bossier City, Central, Lafayette, Monroe, Shreveport, Alexandria, and beyond.
Here are some of the most common mistakes that can invalidate contractor coverage—and how to avoid them.
1. Misclassifying the Type of Work
Insurance policies are based on risk. And that risk is largely determined by what kind of work is being done. If a contractor lists their business as “remodeling” but is actually doing roofing, concrete work, or electrical installation, they’re misclassified. And when a claim is filed—say, for a fall off a roof or electrical fire—the insurance company might deny it, citing a mismatch between the declared work and the actual risk.
Always be precise and honest about the kind of contracting work being performed. If the scope of work changes, notify the insurer immediately.
2. Letting Coverage Lapse
A missed payment or failure to renew a policy on time can result in a lapse in coverage—even if it’s just for a few days. During that window, if anything goes wrong, it may fall completely outside the protective reach of the policy.
Set reminders for renewal dates. Opt for auto-pay if possible. And if cash flow is an issue, talk to the insurer about payment plans rather than allowing the policy to cancel.
For a quick quote, you can contact our quote department directly at (504) 441-RATE (7283) or complete the Online Quote Request form and you will be contacted ASAP.
3. Failing to List Subcontractors
Subcontractors may not be employees, but they can still expose a business to liability. If a subcontractor causes damage or injury on the job and they’re not listed or properly covered under a policy, the general contractor could be held responsible—and the insurance company may deny the claim due to the unreported risk.
Make sure to disclose whether subcontractors are used, how often, and in what capacity. Verify that all subs carry their own coverage, and request Certificates of Insurance before work begins. Whether it’s a General Liability policy or Workers Comp policy these policies are subjected to end of year audits where If a contractor uses subcontractors, a General Liability policy audit will include reviewing how much was paid to those subs and whether they had their own insurance. During the audit, the insurance company will ask for 1099 forms, payment records, and certificates of insurance (COIs) from each subcontractor. If a subcontractor didn’t carry their own General Liability coverage, the contractor’s policy may be charged as if that subcontractor was an uninsured employee—potentially increasing the premium. To avoid surprise charges, contractors should always collect Certificates of Insurance from subs before they start work and make sure the coverage is active and meets policy requirements.
4. Not Disclosing Employee Count or Payroll Accurately
Workers’ compensation and general liability policies are often priced based on payroll and headcount. Underreporting these numbers might lower premiums in the short term, but it’s a surefire way to trigger audits, penalties, and possibly denied claims down the road.
If the business is growing, hiring more people, or expanding operations, those changes should be reflected in the policy. Insurance is a contract—accurate data keeps that contract valid.
5. Skipping Inland Marine or Equipment Coverage
A lot of contractors assume their tools and equipment are covered under general liability. Not so. General liability covers damage caused by the contractor’s operations—not to their own property. For coverage on tools, generators, trailers, and other movable gear, an inland marine policy is needed.
Leaving equipment uncovered is a common oversight. It’s not just about theft. Fire, flood, even a car accident while hauling a trailer can all wipe out thousands of dollars in gear if it’s not covered.
6. Ignoring Contractual Insurance Requirements
Some jobs—especially government or commercial projects—require specific limits of liability, endorsements, or additional insured clauses. Submitting a certificate without meeting those requirements can void coverage for that job entirely.
Worse, if something happens, the contractor could be stuck holding the bill with no backup from the insurer. Always read the insurance requirements in a contract carefully and share them with the agent before starting work.
7. Delaying Claims or Failing to Report Incidents
A lot of contractors delay reporting an incident, hoping to fix the issue quietly or wait and see if it becomes a problem. But insurance policies often have strict notice requirements. Failing to report something in a timely manner—especially injuries or property damage—can lead to a denied claim later.
Report the incident, even if it seems minor. It’s better to have it documented and not need it than to need it and have no record.
Conclusion
Contractor insurance is a must—but it’s not a “set it and forget it” situation. Keeping the policy valid means being proactive, honest, and on top of changes as they happen. From misclassifying work to forgetting about subs, the mistakes that invalidate coverage are almost always preventable.
Whether operating out of Metairie or Monroe, Gretna or Grand Isle, contractors in Louisiana and Mississippi face similar risks—and similar opportunities to protect what they’ve built.
For a quick quote, you can contact our quote department directly at (504) 441-RATE (7283) or complete the Online Quote Request form and you will be contacted ASAP.
