What's required in WI
Wisconsin Contractor Insurance Requirements
Wisconsin law requires a minimum amount of coverage for construction contractors and their subcontractors before they can take on a job or be certified. Certain subcontractor types will have different requirements than others, often depending on risk factors involved. For general contractors in Wisconsin, there are two minimum insurance requirements: general liability (or surety bond) and worker compensation. Larger companies or those involved in larger projects with more employees face additional risk and may require additional coverage.
General Liability Insurance
General liability insurance is a fundamental type of coverage that every contractor should have and is required per WI law. This overarching insurance protects contracting firms and independent contractors from liability in property damage, third-party injury claims and even advertising injury. As part of the requirements of general contractor certification, an entity must prove financial responsibility via an active general liability policy. WI requires a general liability policy covering at least $250,000 per occurrence due to 3rd-party bodily injury or property damage, or the company must have a surety bond in place.
Option 2: Surety Bond
General contractors in WI can also choose a surety bond in lieu of general liability insurance that guarantees payment from the surety company in the event of a claim. The surety company offers a financial guarantee to the state that the principal (the contractor) will fulfill its project obligations.
The contractor entering into this type of bond is still responsible for repaying the bond to the surety company in the event of a claim, but payment will be subject to the bond’s agreement which will dictate surety limits and means of reimbursement.
Workers' Compensation Insurance
As is the case with most employers, workers' compensation insurance is required coverage for contractors in Wisconsin. This insurance provides benefits to employees who are injured or become ill as a result of their work. Due to the physical nature of contracting work and the risks involved, these coverages should be robust. Workers' compensation insurance can cover medical expenses, lost wages, and rehabilitation costs in the event of an injury resulting from work.
Unemployment Compensation Insurance
Again, like most WI companies with employees, any general contractor operating with an employed staff is required to provide unemployment insurance. This coverage supplies a portion of lost wages for any individual who is unemployed through no fault of their own. Any contractor with employees must pay into this system.
Commercial Auto Insurance
If a contractor’s work includes driving any company vehicle for work purposes, this type of policy is required under Wisconsin state law. WI rules require business auto insurance minimums covering bodily injury, property damage and uninsured motorist coverage. This rule applies to any business-owned vehicles across all industries. If a contractor is also operating larger commercial trucks, additional trucking industry coverage requirements may apply.Contact an Advisor