New Year, New Risks: The Insurance Checkup Every Contractor Should Do Before the Year Starts
Mr. Hoots explains why starting the year underinsured is one of the most expensive mistakes contractors make.
Hoo’s there? Mr. Hoots here, checking the calendar and your coverage at the same time. As one year wraps up and the next one begins, most contractors focus on new jobs, new goals, and new equipment. What often gets missed is the insurance side of the business, and that oversight can turn a strong start into a costly setback.
Before you take your first job of the new year, let’s walk through a quick insurance checkup that can save you from surprises down the road.
What usually changes from one year to the next
Even if your work feels the same, your risk often is not. Common changes include:
- Higher payroll from raises, new hires, or overtime
- New subcontractors added during busy seasons
- Additional vehicles, trailers, or equipment
- Expanded services you did not originally list on your policy
- Larger or more complex projects than last year
If your coverage did not change with your business, gaps may already exist.
Workers’ Comp details contractors forget to update
The new year is when workers’ comp problems usually show up. Watch out for:
- Payroll estimates that no longer match reality
- Owners who should be included or excluded but are not
- Subcontractors without proper certificates of insurance
- Class codes that do not reflect the work you are actually doing
These issues often surface during audits, and that is when costs jump fast.
Vehicles and equipment that quietly outgrow coverage
That work truck you added mid-year or the new trailer you picked up may not be fully covered. Make sure to review:
- Vehicles used for work that are still on personal auto policies
- Trailers not specifically listed or scheduled
- Tool and equipment values that increased with replacements or upgrades
- Equipment stored offsite or left at job locations
Tools disappear quickly. Coverage gaps disappear even faster when a claim is denied.
Contracts and COIs rolling into the new year
Many commercial clients reset requirements at the start of the year. Be ready for:
- Updated COI requests with new Additional Insured wording
- Higher liability limits
- Waivers of Subrogation or Primary and Non-Contributory language
- Proof of Workers’ Comp even for owner-only businesses
Having these ready keeps jobs moving and payments on track.
Coverage mistakes to avoid starting the year
- Assuming last year’s policy still fits
- Waiting for an audit or claim to review coverage
- Letting subcontractor paperwork slide
- Forgetting to report new services or higher-risk work
- Thinking small changes do not matter
They do. Small gaps lead to big problems.
Quick start-of-year safety wins
- Review safety procedures with your crew
- Update equipment maintenance logs
- Refresh job-site documentation habits
- Confirm PPE usage and storage
- Revisit vehicle and trailer security
Safer operations usually lead to better rates and fewer claims.
Mr. Hoots’ Bottom Line
The new year is the best time to fix insurance issues before they cost you money. A short coverage checkup now can prevent denied claims, surprise audits, and lost contracts later.
Protect the work. Protect the wallet. Because starting the year right beats fixing problems after the damage is done.