Business Insurance

Ask most small business owners what their risk management program looks like and you will get one of two answers: a description of their insurance policies, or a blank look.

Insurance is a risk management tool. It is not a risk management program. The distinction matters because insurance only addresses risks that have already happened. It pays for losses after the fact. Risk management addresses what leads to those losses: the exposures, the controls, the monitoring, and the financial planning that determine how well a business weathers a serious disruption.

The framework below is not complicated. It is four questions that, answered honestly, tell you where your business stands and what to do about it.

Identify: What Could Actually Hurt Your Business?

Risk identification is the starting point most businesses skip. It requires stepping back from the day-to-day and asking: what scenarios could seriously damage or destroy this business?

The categories are consistent across most small businesses. Property damage, including fire, flood, theft, and equipment failure, can interrupt operations and generate repair or replacement costs that a business cannot absorb without insurance or sufficient reserves. Liability claims, including those arising from a customer injured on your premises, a product defect, or a professional error, can trigger lawsuits that outlast the underlying incident. Workforce disruptions, including a key employee being injured or incapacitated, labor shortages, and workers’ compensation claims, can affect operational continuity. Financial and cyber risks, including fraud, ransomware, business email compromise, and regulatory penalties, are increasingly common even for businesses that would not describe themselves as technology-dependent.

According to the Federal Emergency Management Agency, approximately 40 percent of small businesses do not reopen after a natural disaster. The businesses that do recover consistently share one characteristic: they had thought through the scenario before it happened.

Assess, Control, and Transfer: The Full Framework

A risk assessment forces prioritization: for each identified exposure, how likely is it to occur, and how severe would the impact be if it did? High likelihood and high severity risks deserve the most immediate attention, both in terms of prevention and insurance. Low likelihood risks with catastrophic potential — a major product liability suit, a significant natural disaster — may warrant insurance even when the probability is low, because the financial impact of not being covered is existential.

Loss control is where the insurance bill and the risk management program intersect. Carriers look at your loss control practices when underwriting your coverage and businesses with formal safety protocols, documented procedures, and evidence of risk management investment consistently receive better terms than those without.

The Dynamic Risk Synergy Portal provides practical loss control tools that help small businesses identify and address operational vulnerabilities before they become claims. The final step is ensuring the risks that cannot be retained are properly transferred and that requires a thorough commercial insurance review confirming that coverage limits are adequate, exclusions are understood, and gaps between policies are identified. Risk management and insurance work together. The businesses that treat insurance as a last resort rather than a planning tool consistently discover their gaps when they can least afford to.

Ready to build a risk management program for your business, not just an insurance policy? The team at Tooher-Ferraris has been helping small and mid-size businesses manage risk intelligently since 1932. Contact us today to schedule a no-obligation consultation.

Most community associations carry at least some insurance. The question worth asking is whether what they carry is actually complete and whether the gaps they do not know about will surface at the worst possible moment.

The Community Associations Institute identifies four essential pillars of a complete community association insurance program: property coverage for common areas and shared structures, commercial general liability, crime and fidelity coverage, and directors and officers liability. Most associations carry the first two by requirement or lending mandate. The third and fourth, crime and fidelity, and D&O, are where coverage gaps most consistently live, and where the financial and personal consequences of being unprotected are most significant.

Pillar One: Property Insurance

Property coverage protects the physical assets the association owns or is responsible for. These assets include common area buildings, amenities, shared structures, and, in condominium communities, often the building envelope itself. For condominiums, clarifying what the master policy covers versus what individual unit owners are responsible for is one of the most common points of confusion for boards and residents.

Property coverage must be reviewed not just at renewal but whenever construction costs change meaningfully. Many associations set their property values based on estimates that are now several years old. Given that construction costs remain significantly elevated above pre-pandemic levels, those values may no longer reflect what a rebuild would actually cost. This creates an underinsurance risk that most boards do not discover until a major loss occurs.

Pillar Two: General Liability

Commercial general liability covers third-party bodily injury and property damage occurring in common areas. Slip and fall incidents, injuries at pools and playgrounds, and property damage caused by association maintenance activities all represent GL exposures. Summer is peak liability season for common area amenities, with pool decks, waterfront areas, and recreation facilities seeing maximum use and maximum incident frequency.

Pillar Three: Crime and Fidelity Coverage

Crime and fidelity coverage protects the association’s financial assets against theft, embezzlement, forgery, check fraud, and funds transfer fraud by board members, employees, managers, or vendors. Reserve funds and operating accounts represent attractive targets and the people with access to those funds are exactly who this coverage addresses.

Many associations carry a basic fidelity bond that covers employee dishonesty. What most do not realize is that a fidelity bond does not cover business email compromise or wire fraud. These schemes are the most common financial attack vector affecting HOAs in 2026. Funds transfer fraud and social engineering are separate insuring agreements that must be specifically added to a crime policy. Industry guidance typically recommends crime coverage equal to at least three months of regular assessments plus the total reserve fund balance.

Pillar Four: Directors and Officers Liability

D&O insurance protects board members from personal financial liability arising from governance decisions. A homeowner who alleges the board enforced rules inconsistently, denied an architectural request improperly, managed finances irresponsibly, or conducted an election unfairly can name individual board members in a lawsuit. Legal defense costs alone average tens of thousands of dollars even when the board ultimately prevails. Volunteer status does not reduce this exposure. A mid-year program review confirming all four pillars are in place at adequate limits is one of the most valuable steps a community association manager or board chair can initiate. Specialty programs designed for community associations address all four pillars in a coordinated structure so coverage lines are complementary rather than leaving gaps between policies.

Ready to make sure your association’s program is complete? The team at Tooher-Ferraris has been helping community associations protect their communities since 1932. Contact us today to schedule a no-obligation program review.

For decades, captive insurance was a tool that large corporations used and mid-market businesses read about. The capital requirements, administrative complexity, and domicile setup costs kept most companies below a certain threshold on the outside looking in. That is changing and in 2026, it is changing fast.

The global captive insurance market was valued at approximately $79 billion in 2024. According to Zion Market Research, it is projected to reach $120 billion by 2034 and the growth is no longer concentrated at the top of the market. Protected cell companies, group captives, and cell structures are making captive access viable for businesses that would have been turned away a decade ago. The Cayman Islands, one of the leading captive domiciles, formed more captive licenses in the first half of 2025 than in all of 2024 combined.

The companies driving that growth are not Fortune 500 firms. They are mid-market manufacturers, construction companies, transportation businesses, and professional services firms that have gotten tired of absorbing volatile insurance market swings and are ready to take more control of their risk financing.

What a Captive Actually Is and What It Isn’t

A captive insurance company is a licensed insurance entity owned and controlled by the business it insures. Instead of paying premiums to a third-party carrier and having underwriting profit accumulate on the carrier’s balance sheet, the business retains a portion of that risk and, in favorable loss years, retains the underwriting profit as well.

Captives are not self-insurance. They are licensed, regulated insurance entities with formal governance, actuarial pricing, and reinsurance structures. A business operating through a captive still transfers catastrophic risk to the commercial market. The captive typically sits in the primary or lower layers of an insurance program, with excess reinsurance providing coverage for large or unusual losses.

Group captives allow multiple companies, often operating in the same or similar industries with comparable risk profiles and safety cultures, to share the structure and its costs. A single mid-market company may not have the premium volume to justify a standalone captive, but participating in a group captive provides many of the same benefits, including premium stability, underwriting profit retention, improved data visibility, and insulation from market volatility.

Why Mid-Market Companies Are Entering the Captive Market in 2026

The commercial insurance market for certain lines has created conditions that make captives increasingly attractive. General liability, commercial auto, and umbrella/excess carriers have restricted capacity and raised rates for accounts with adverse loss experience or sector-based concerns. Social inflation, driven by nuclear verdicts, third-party litigation funding, and expanding theories of liability, continues pushing claim severity upward in ways that affect pricing broadly, not just for accounts with poor loss history.

Businesses that invest in safety, training, fleet management, and operational discipline are often priced alongside peers who do not because traditional carriers can only underwrite the visible data. A captive rewards discipline directly: better loss performance means better financial outcomes for the captive owner, not for the carrier.

The captive insurance solutions conversation typically starts with a feasibility study, which is an actuarial and financial analysis of whether the business’s premium volume, risk profile, and financial position support captive participation. Companies paying more than $500,000 annually for general liability, auto, and umbrella coverage are often strong candidates, though group structures lower that threshold considerably.

How to Know If Your Business Is a Candidate

The strongest captive candidates share a few characteristics: consistent, well-managed risk profiles with investment in loss control; stable premium history without major unfavorable claims trends; financial discipline and sufficient working capital to fund the retained layer; and leadership willing to treat risk financing as a long-term strategy rather than a transactional annual renewal.

If your business fits that profile and you are regularly absorbing commercial market volatility without a clear mechanism to insulate yourself from it, a captive feasibility conversation is worth having before your next renewal, not after it.

Ready to explore whether captive insurance belongs in your risk financing strategy? The team at Tooher-Ferraris has been helping businesses evaluate and structure alternative risk programs since 1932. Contact us today to schedule a no-obligation consultation.

Your commercial property policy covers your building. Your general liability covers third-party bodily injury and property damage. What covers the $80,000 excavator parked at a job site three towns over?

For many contractors, the honest answer is: nothing.

Construction is a mobile industry. Tools travel between job sites, equipment gets staged at temporary locations, materials sit on flatbeds overnight, and rented machinery moves in and out of projects daily. Standard commercial property policies are built around fixed locations, and they typically do not follow your assets when they leave the building. That gap is an inland marine exposure, and closing it is one of the most overlooked steps in a contractor’s insurance program.

What Standard Property Policies Don’t Cover

Commercial property insurance is designed to protect assets at a scheduled location — your office, your yard, your warehouse. When equipment leaves that location, most standard policies either exclude coverage entirely or impose sub-limits that bear no relationship to actual replacement costs.

The gaps vary by policy, but contractors commonly find that standard commercial property coverage does not adequately protect tools and equipment stored at or transported to temporary job sites, equipment in transit between locations, rented or leased machinery the contractor is responsible for under contract, materials stored off-premises awaiting delivery, or mobile equipment like compressors, generators, and forklifts that move regularly.

This is not a fringe concern. According to the National Equipment Register, construction equipment theft costs the US industry an estimated $400 million annually, and those losses disproportionately impact small and mid-sized contractors who cannot absorb a six-figure replacement without disrupting active projects. According to Gallagher’s 2026 market outlook, construction-related replacement costs remain 15 to 20% above pre-pandemic levels — which means a piece of equipment stolen or destroyed today costs significantly more to replace than the value on your current schedule.

What Inland Marine Insurance Actually Does

Despite its name, inland marine has nothing to do with water. The term originates from the insurance industry’s historical distinction between ocean cargo and goods transported over land. For contractors, an inland marine policy — often called a contractor’s equipment floater — is specifically designed to protect property that moves.

Coverage typically includes owned tools and equipment wherever they are located, whether on a job site, in transit, or at a storage facility. High-value scheduled items like cranes, excavators, and lifts can be listed individually with agreed value coverage. Blanket limits cover unscheduled tools and small equipment up to a per-item and aggregate cap. Equipment you rent or borrow and are contractually responsible for can also be included, as can technology tools used in the field.

Coverage terms vary significantly by policy, so reviewing the specific causes of loss, deductibles, and any exclusions for unattended equipment is essential. Many policies, for instance, exclude theft from an unattended vehicle unless there is visible evidence of forced entry — a detail that surfaces at claim time in ways contractors do not anticipate.

The Right Time to Review Is Before You Need It

The specialty programs available to contractors in 2026 include highly competitive inland marine options, even for accounts with prior claims. An inland marine review should include a current equipment inventory compared against your commercial insurance policy schedule, a check on rented equipment obligations and whether they’re covered, and a look at transit exposures for materials and tools in transit between sites. OSHA’s ongoing emphasis on jobsite safety equipment standards is a timely reminder that the tools enabling compliance with those standards need their own protection when they are off your property.

Ready to make sure your tools and equipment are actually covered everywhere your business operates? The team at Tooher-Ferraris has been helping contractors protect their assets since 1932. Contact us today to schedule a no-obligation consultation.

When did you last sit down and go through your equipment schedule, line by line?

For most contractors, the honest answer is: at some point during the original policy setup, and not since. That is a problem — and in 2026, it is a more expensive problem than it used to be.

Construction replacement costs remain elevated across the board. Equipment values have shifted. Over the course of a busy year, you have likely added tools, acquired new machinery, sold off old assets, or taken on rented equipment under contract. Some items on your current schedule may no longer exist. Others that do exist are not listed at all. That mismatch between what you own and what your insurance program actually covers is underinsurance and most contractors do not discover it until a claim forces the issue.

Why Equipment Schedules Go Stale

Insurance schedules are snapshots. They capture the state of your operation at the time the policy was written or last formally updated. Between renewals, equipment changes constantly — purchases, disposals, lease returns, rental agreements that come and go with specific projects. Most of those changes never reach your broker.

The result is a schedule that may reflect your operation from two or three years ago. According to Gallagher’s 2026 market analysis, construction-related replacement costs remain 15 to 20% above pre-pandemic levels. An excavator that cost $120,000 in 2021 may cost $140,000 or more to replace today. If your scheduled value is still $120,000, you will absorb that gap out of pocket after a total loss.

According to Sentry Insurance’s 2026 Construction Outlook, contractors who have not updated their equipment and property values within the last 12 months face the real possibility of discovering a coverage shortfall mid-loss when there is no opportunity to correct it. Beyond the dollar impact on a single claim, many inland marine and equipment floater policies include coinsurance provisions. If declared values are significantly below actual replacement cost, the insurer may apply a coinsurance penalty that reduces the payout on even a partial loss.

What a Good Equipment Audit Actually Looks Like

An equipment schedule review does not need to be a major project. At its core, it is a structured comparison of what you own against what is listed on your policy, followed by a conversation with your broker about whether the values, coverage structure, and deductibles still match your operation.

In practice, that means pulling your current equipment list from your fixed asset records and comparing it item by item to the policy schedule, identifying items that appear on the schedule but have been sold, returned, or written off, adding any equipment acquired during the policy period that is not currently listed, and updating scheduled values to reflect current replacement costs rather than depreciated book values.

One category contractors consistently miss: technology and field equipment. Laptops, tablets, GPS units, and laser measurement devices have real replacement costs. They also travel with crews daily, making them some of the most exposed assets on your program. Most were not on anyone’s radar when the original policy was set up years ago.

When to Do It — and How Often

The most natural time is 60 to 90 days before your policy renewal, giving your broker room to market updated values and structure coverage before the new period begins. The Dynamic Risk Synergy Portal offers loss control resources that complement a commercial insurance coverage review, helping identify both operational gaps and insurance program vulnerabilities before they become claims. At minimum, a formal equipment schedule review should happen once a year. If you have had a significant year — major acquisitions, new project types, expanded operations — more frequent reviews are warranted. Your insurance program is only as accurate as the information behind it.

Ready to make sure your equipment coverage reflects what your business actually owns? The team at Tooher-Ferraris has been helping contractors build accurate, complete insurance programs since 1932. Contact us today to schedule a no-obligation consultation.

For many contractors, the biggest obstacle to winning a project isn’t pricing, experience, or qualifications. It’s bonding capacity.

As public and private project opportunities continue to grow in 2026, many contractors are discovering that securing a surety bond is no longer as routine as it once was. Sureties are taking a closer look at financial strength, backlog, cash flow, and overall business performance before extending credit. A contractor who qualified easily a year ago may find today’s underwriting process far more demanding.

The surety market remains financially strong, but underwriting standards are becoming more selective. Contractors who understand these changes and prepare for them well before bid day will be in a much stronger position to pursue larger opportunities, expand into new markets, and keep projects moving without costly surprises.

Why the Window Is Narrowing

The U.S. surety market has enjoyed what analysts at AM Best described as a “golden era of profitability,” with net profit margins above 30% for 11 consecutive years through 2024. Loss ratios stayed well below industry averages, fueled by steady public construction spending tied to the Infrastructure Investment and Jobs Act and other federal programs.

That runway is shortening. IIJA funding is set to expire in September 2026, and the pipeline of federally backed public work that has sustained contractor backlogs is expected to thin as a result. The Associated Builders and Contractors’ Construction Backlog Indicator stood at 8.1 months in February 2026 — a healthy figure — but analysts are already projecting softening in certain sectors as infrastructure dollars wind down.

At the same time, sureties have become more selective about which contractors they support. According to a 2026 surety and construction forecast published by TSIB Inc., sureties are scrutinizing cash flow, underbilling trends, WIP report accuracy, and reliance on key personnel more closely than in recent years — particularly for mid-market contractors pursuing projects larger than their historical track record. The margin for error has narrowed.

What Sureties Are Actually Looking At

Understanding how sureties evaluate bonding requests is the first step toward protecting and growing your capacity. The three C’s of surety underwriting — Character, Capacity, and Capital — remain the core framework. In practice, here is where smaller contractors most often run into trouble.

Financial statements: Sureties increasingly expect CPA-prepared financials, not internally generated reports. If your financials are reviewed rather than compiled or audited, that puts you at a disadvantage on larger projects.

WIP schedules: A current, accurate work-in-progress report is non-negotiable for contractors seeking meaningful bonding capacity. Underbilling patterns and cost overruns on open jobs are red flags that trigger capacity reductions.

Cash flow documentation: Sureties want to see that your business generates consistent cash, not just revenue. Thin margins on recent projects or heavy reliance on a single large customer are concerns underwriters will raise.

Bank lines of credit: Having an established, unused banking relationship signals financial discipline. Contractors without a credit line often find their bonding capacity limited as a result.

How to Strengthen Your Position Before Q4

If public work is part of your growth plan, or if you simply want to protect access to bonded projects you already pursue, the time to address these items is now, before post-IIJA competition for available work intensifies.

Start by requesting a prequalification review with your surety bond producer. This is a diagnostic conversation about your current financial position, WIP, and the capacity you will need over the next 12 to 18 months. Many contractors skip this step until they are already mid-bid, which is too late to fix the issues sureties will surface.

Make sure your CPA understands construction accounting. Job costing, percentage-of-completion revenue recognition, and proper WIP accounting are specialized areas where general-purpose firms sometimes miss the mark. Sureties notice.

As part of a broader commercial insurance review, your surety bond program should be evaluated annually — not just at renewal, and not just when a large project is on the table. The surety market still has capacity. Access it on your terms by treating bonding as a strategic relationship, not a transaction.

Ready to review your surety bonding position? The team at Tooher-Ferraris has been helping contractors navigate the bond market and protect their ability to win work since 1932. Contact us today to schedule a no-obligation consultation.

A structural issue surfaces six months after project close. The owner’s legal team traces the cause to a design decision made during the integrated planning phase. Your general liability carrier receives the claim and issues a denial. Design errors are not a general liability exposure. They are a professional liability claim. You do not carry that coverage.

This is not an edge case. It is a gap that exists in the majority of small and mid-sized design-build firms operating today, and as design-build project delivery continues to grow, so does the exposure.

Why Design-Build Blurs Every Liability Line

In traditional project delivery, the liability separation is relatively clean. The architect or engineer carries professional liability — also called errors and omissions, or E&O — for design decisions. The general contractor carries general liability for construction execution. Claims fall into distinct buckets.

Design-build collapses that structure. When one entity holds both design and construction obligations under a single contract, the liability for problems at the intersection of design and construction lives entirely with the design-build contractor. The owner does not need to sort out whose error caused the problem. The design-build entity owns all of it.

According to the Design-Build Institute of America, design-build now accounts for more than 44% of US construction volume across commercial, institutional, and infrastructure sectors — a share that has grown steadily for over a decade. Engineering News-Record has reported that as design-build projects grow in size and complexity, more project owners are contractually shifting risk back to the design-build contractor, with insurance requirements as the primary mechanism.

General liability covers third-party bodily injury and property damage caused by your operations. It does not cover pure economic loss arising from a design error, an omission in drawings, or a specification that turns out to be wrong. Those claims fall under professional liability and without a professional liability policy, the design-build contractor is uninsured for them.

What Professional Liability Actually Covers

A professional liability policy covers claims arising from negligent acts, errors, or omissions in the performance of professional services. For design-build contractors, that means structural or mechanical errors in design documents, failure to meet code requirements identified during design, cost overruns caused by inaccurate specifications or scope documents, and third-party claims for economic loss tied to design decisions.

GL and professional liability do not overlap. They are designed to cover fundamentally different categories of loss. A project with a design flaw that causes water intrusion damage could generate both a GL claim for the property damage and a professional liability claim for the cost to redesign and correct the underlying error. Full protection requires both policies.

One additional detail matters here: professional liability policies are typically written on a claims-made basis, meaning the coverage in force when a claim is reported is what applies — not necessarily the coverage in place when the alleged error occurred. Maintaining continuous coverage and understanding the retroactive date on your policy is essential.

What Project Owners Are Requiring Right Now

Carrying professional liability is no longer just about internal risk management. More project owners, particularly on institutional, municipal, and private commercial work, are contractually requiring evidence of professional liability coverage before executing design-build agreements.

Sophisticated owners have become aware of the coverage gap and are shifting that risk back to the contractor through insurance requirements and indemnification language. If you are pursuing work where professional liability is a contract requirement and you do not carry it, you are either losing bids or misrepresenting your program.

A specialty programs review with an experienced broker can clarify what coverage limits are appropriate for your project types, whether your current commercial insurance program has any incidental professional liability extensions, and how to structure both policies so they work together without gaps or overlap.

Ready to make sure your design-build operation is fully covered? The team at Tooher-Ferraris has been helping contractors protect their businesses since 1932. Contact us today to schedule a no-obligation consultation.

Here’s a number worth knowing: the 2025 workers’ compensation combined ratio came in at 91%, according to NCCI’s 2026 State of the Line report — the twelfth consecutive year of underwriting profitability in the line. For contractors, that translates to one of the most stable WC markets in recent memory, with NCCI filing rate decreases in multiple states and most construction operators seeing flat-to-modest increases at renewal.

But stability isn’t the same as free. Your experience modification rate is being built right now, claim by claim, and whatever happens on your job sites this year will follow your program for the next three renewal cycles. The contractors who use a favorable market to tighten their cost-control disciplines are the ones who stay in good shape when the market eventually shifts. Here are seven strategies that make a measurable difference.

1. Understand Your Experience Mod and What’s Driving It

Your EMR isn’t just a number on your policy — it’s a direct function of your actual losses versus expected losses for employers of your size and class. Most contractors know their mod. Few have ever had someone walk them through exactly which claims are driving it. Request a detailed loss run from your carrier and review the open reserves on claims you may have considered closed. Unreserved or over-reserved claims inflate your mod even when the injury has resolved.

2. Build a Formal Return-to-Work Program

This is the single highest-ROI investment in workers’ comp cost control. According to OSHA research, injured workers who return to modified duty within the first two weeks of an injury have significantly lower total claim costs and faster full-recovery timelines than those who remain on full disability. A written RTW program with defined modified-duty job descriptions signals to carriers that you manage claims actively, not reactively.

3. Audit Your Payroll Classifications Regularly

Misclassification is more common than most contractors realize, and it runs in both directions. Workers classified under a higher-rated code than their actual duties warrant are generating unnecessary premium. As your business grows and roles evolve, annual classification audits with your broker can surface meaningful savings or protect you from an audit adjustment you didn’t see coming.

4. Prequalify Subcontractors on Insurance, Not Just Price

Every uninsured or underinsured subcontractor is a potential statutory employer exposure. If a sub’s worker is injured and their carrier denies the claim — or their limits are exhausted — your WC program may be the backstop. Prequalifying subs on their workers’ comp carrier, limits, and EMR before awarding work is a direct cost-control measure, not an administrative nicety.

5. Implement a Documented Safety Program — Not a Generic One

Carriers reward contractors with credible, site-specific safety documentation at renewal. A generic safety manual downloaded from the internet does not move the needle. A documented program with signed employee training records, incident investigation reports, corrective action logs, and toolbox talk attendance sheets demonstrates a culture of safety that underwriters can price. The NSC’s June National Safety Month framework, organized around continuous improvement, employee engagement, roadway safety, and wellbeing, is a useful structure for formalizing what many contractors already do informally.

6. Report Claims Immediately and Stay Involved

Late claim reporting is one of the most expensive mistakes in workers’ comp management. Claims reported within 24 hours have consistently lower ultimate costs than those reported days or weeks after an incident, because early intervention enables proper medical management and limits the window for claim escalation. Once a claim is reported, stay engaged — know the adjuster, understand the reserve, and confirm that a return-to-work plan is in motion.

7. Review Your Program With a Broker Who Knows Construction

Workers’ comp is not a commodity purchase. The difference between a broker who shops your program to the standard market and one who benchmarks your program against your peers, analyzes your mod trajectory, and structures a renewal narrative around your safety investments is substantial. For contractors managing complex risk profiles, captive insurance solutions may also be worth exploring as an alternative to the standard market. Learn more about how commercial insurance for contractors is structured to address the unique cost drivers in construction.

Ready to take control of your workers’ comp program before the next renewal? The team at Tooher-Ferraris has been helping construction businesses manage their risk and reduce their costs since 1932. Contact us today to schedule a no-obligation consultation.

Picture this: one of your employees runs a quick errand in their personal car, picks up supplies, drops off a proposal, and stops by a client’s office. On the way back, they rear-end another vehicle. The other driver is injured. The lawsuit names your employee  and your business.

Now picture this: you had no idea this was even a risk.

June is National Safety Month, and while most businesses think about slips, trips, and on-site hazards, one of the most expensive risks your company faces is rolling out of your parking lot every single day. Commercial auto coverage gaps are costing businesses millions and most owners don’t find them until after a claim.

The Three Coverage Gaps That Catch Business Owners Off Guard

1. The “Personal Car for Work” Problem

If an employee drives their own vehicle for any business purpose — a client meeting, a supply run, a job site visit — and causes an accident, their personal auto policy will likely deny the claim. Personal policies exclude commercial use. That’s where Hired and Non-Owned Auto (HNOA) coverage steps in. Without it, the liability for that accident falls directly on your business.

According to the National Highway Traffic Safety Administration (NHTSA), there were over 6.1 million police-reported crashes in 2023. Every one of those was someone’s employee, client, or contractor. The odds that a business-related trip is involved at any given moment are not small.

2. The Gap Between What You Own and What You’re Liable For

Many business owners carry a commercial auto policy on vehicles they own — and assume that’s sufficient. It isn’t, if employees are ever using personal vehicles, rented vehicles, or vehicles owned by a subcontractor. HNOA coverage is a separate, often inexpensive addition to your policy that closes this gap entirely, yet countless small and mid-sized businesses are still operating without it.

3. Your Limits Were Set Years Ago

Commercial auto is one of the hardest lines in the 2026 market. Industry analysis indicates base rate increases of 7% to 15% are being applied to commercial auto policies in 2026, driven by social inflation and sharply rising vehicle repair costs tied to supply chain pressure. Jury awards exceeding $10 million are no longer rare in commercial auto cases. If your liability limits haven’t been reviewed in the last two years, there’s a reasonable chance they no longer reflect the real cost of a serious claim.

What “Driving for Business” Actually Means

The legal standard for business use is broader than most owners realize. If your employee is making any trip that benefits the company — even something as routine as grabbing lunch during a work errand — that trip may be considered business use under a plaintiff’s attorney’s argument. Courts have consistently sided with broad interpretations. That $300,000 personal auto limit your employee carries isn’t going to be enough. The lawsuit will target your business.

What Good Commercial Auto Coverage Actually Looks Like

A well-structured program for a small to mid-sized business typically includes:

• Owned vehicle coverage — liability, collision, comprehensive, and uninsured/underinsured motorist
• HNOA coverage — for personal vehicles used for business and rented vehicles
• Appropriate liability limits — reviewed annually against current jury verdict trends
• Driver qualification standards — Motor Vehicle Record (MVR) checks at hire and annually
• Telematics or dashcam documentation — increasingly valued by underwriters and a strong claims defense tool

Underwriters in 2026 are actively separating well-managed fleets from average risks and pricing accordingly. Businesses that invest in driver controls and documentation are seeing better terms. Those that don’t are absorbing rate increases on top of exposure gaps.

Don’t Wait for the Claim to Find the Gap

National Safety Month is a useful prompt to look beyond the job site. Your vehicles, owned, rented, and borrowed, represent a major liability exposure that deserves the same annual review as your property or general liability program. A quick coverage audit with your broker can identify gaps, align limits to current market realities, and put the right documentation in place before something goes wrong.

Explore commercial insurance solutions and specialty programs designed for businesses with complex auto exposures. For current NHTSA crash data, visit nhtsa.gov. For commercial auto market trends, RIMS.org offers ongoing industry analysis.

Ready to close your commercial auto coverage gaps? The team at Tooher-Ferraris has been helping businesses build smarter insurance programs since 1932. Contact us today to schedule a no-obligation consultation.