FAQs

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Helping you find answers

Insurance can be confusing and overwhelming. We’re here to make it simple and easy so you can get a policy that makes sense for your unique situation.

Check out our FAQs below to learn more about DJM Insurance and the services we offer. If you can’t find the answer to your question, or you’re ready to discuss the details of the policies we offer, don’t hesitate to contact us. We would be happy to speak with you about our personalized policy options!

General Liability

What is General Liability insurance?

This type of insurance can protect you from costly claims that may come up as a result of doing normal business operations. For example, it can cover things like bodily injury and property damage during a project and after a job is complete.

Who needs General Liability insurance?

Every business needs a policy, but what that policy includes may vary. It's important to carefully evaluate your company to determine situations where potential problems could arise so you can get coverage that protects your business.

What does General Liability cover?

General Liability Insurance can be customized to help you cover things like:

  • Premises and operations, in the event an employee or client injures themselves.
  • Products and completed operations, in case your products or services were defective.
  • Cyber liability and data breaches, if your systems are compromised and data is stolen.
  • Employment practices liability, if you are ever accused of wrongdoing by a current or former employee.

Why is General Liability important?

A lawsuit could come your way at any time. With many current and previous employees, partnerships with different contractors and builders, and projects that can be dangerous if not completed properly, it’s important to protect your business from potential litigation that could ruin your company.

How do I determine if I need General Liability?

Every contractor needs General Liability Insurance, but exactly what kind of policy you need will be unique. Speak to a representative at DJM Insurance about your business, your goals, and your worries, and we can craft the right policy for you.

Contractor License Bonds

What kind of bond does a contractor need?

Contractors are required to have a Contractor License Bond. This bond acts as a pledge on the part of the contractor to comply with all local and state regulations when protecting clients from financial loss. Other bonds a contractor may need in order to begin work include a bid performance bond, a payment bond, a maintenance bond, and more, depending on the type of work being done, local regulations, and requests from the client.

How much does a contractor’s bond cost?

In California, contractors must post a surety bond, but amounts can vary depending on the type of work being done. The bond amount is always higher than the actual cost of the bond, and the payout amount depends on the type of work being done. Contractors with great credit can pay as little as one percent of the bond total, with most contractors paying between two and five percent of the bond amount.

What is the difference between bonded and insured?

Insurance involves a blanket policy that protects your business in the event of an accident. A bond, on the other hand, protects a particular project and guarantees it will be executed properly.
The biggest difference between insurance and a bond is that in the event of a claim you don’t have to pay back an insurance claim, but you do have to repay a bond claim. The surety will pay out the claim, then come back to you to get their money back.

What is a payment bond on a construction project?

Payment bonds guarantee that subcontractors and material suppliers will be paid when the project is complete. They are required by the Federal Government, so they are offered in conjunction with other bonds, like contractor license bonds and bid performance bonds.

How does a contractor’s bond work?

First, the contractor completing the work obtains a bond. Once the project is complete, the bond agent is notified and the bond line is freed. If the job wasn’t completed properly, the client can request the funds of the bond and use them to pay another contractor to finish the job.

Bid & Performance Bonds

What is a Bid Bond and how does it work?

Bid bonds are used to help select which contractor gets a particular project. Clients receiving bids from multiple contractors are more likely to choose a contractor with a bid bond because it ensures they abide by the terms of the bid they provide. If the work is in progress, but the terms of the bid are not being met, the contract can be broken and the client can be compensated for the cost difference between the initial contractor's bid and the next-lowest bid from another contractor.

How much does it cost for a Bid Bond?

Costs for Bid Bonds vary depending on the financial history of the contractor, the size of the project, and more. Usually, the bond premium is a percentage of the total cost of the project. Calculating the bond and how much it will cost a contractor involves penal sums that usually range between five and ten percent, in addition to the cost of the project, so it’s important to talk to a DJM insurance specialist to determine exactly how much your next Bid Bond will cost.

What is the difference between a Bid Bond and Performance Bond?

Bid and Performance Bonds are very different. A Bid Bond ensures a contractor will abide by the terms of the bid before the project is awarded, while performance bonds come into effect after a contractor has won the bid, ensuring the actual work is completed. Both protect the clients and contractors from unanticipated costs when a project is left incomplete.

Are Performance Bonds refundable?

Bonds can be refunded when they are never actually submitted to the client. In some extenuating circumstances, bonds can be refunded during the project. However, most of the time, contractors will not receive a refund. It's important to discuss the terms of your bond with your DJM Insurance broker.

What does a Performance Bond cover?

A Performance Bond is designed to protect the client from an incomplete project. If it is not completed per the terms of the agreement, the client can receive compensation for losses and damages. Much of the time, this money is used to pay another contractor to finish the project.

Tools & Equipment

Can you get insurance on tools?

Absolutely! This type of insurance can be added to a new or existing policy at DJM Insurance. Don’t hesitate to contact us to customize this kind of coverage for your business.

Does General Liability Insurance cover tools?

General Liability Insurance does not cover tools. It only covers expenses related to damaged property that belongs to your client.

What is considered Contractor’s Equipment Insurance?

Contractor’s Equipment Insurance is sometimes used interchangeably with Tools and Equipment Coverage. It focuses on large equipment that is transported between work sites, but it can also include other small tools. Likewise, a Tools and Equipment Policy covers small tools in addition to large equipment. What is important is that you choose a policy that covers the equipment you rely on to work on a daily basis.

Do you need receipts for Tools and Equipment Coverage?

Having receipts for the tools on your policy can help prove that you did in fact own the equipment, should you ever file a claim. However, other methods, such as repair receipts and pictures, can also prove that you owned the equipment. A general policy may not require proof of ownership until you file a claim. If you have any concerns about what would and wouldn’t be covered, make sure you bring it up with your DJM representative.

Does insurance cover stolen tools?

Yes! Whether on-site, in storage, or in transit, if any tools or equipment go missing, a Tools and Equipment Policy can cover the costs of replacing what was stolen.

Builders Risk

What is Builder’s Risk Insurance?

Builder's Risk Insurance covers events that can't be planned for, like fire, wind, theft, and vandalism. It may or may not include things like earthquakes, flood, or wind. However, these possibilities can be included in a policy if requested.

Who needs Builder's Risk Insurance?

Another insurance policy may cover the building, which may mean Builder’s Risk Insurance isn’t necessary. However, if it's a new build and no existing insurance policy exists, or if it will be used immediately after it is built, as is the case with rental spaces, a Builder's Risk Policy may be necessary.

How does Builder’s Risk Insurance work?

It should first be determined whether a Builder’s Risk Policy is necessary. If it is, you can work with a DJM specialist to create a policy that covers your project for events that could transpire during the course of construction. If a covered event does transpire, you can file a claim and be reimbursed for damages.

What is the difference between Builder’s Risk Insurance and Course of Construction Insurance?

There is no difference between Builder’s Risk Insurance and Course of Construction Insurance. These two terms are used interchangeably.

Who should be named as the insured on a Builder’s Risk Policy?

The policy will most likely include the owner of the building company, the general contractor, and subcontractors who may be affected to ensure every eventuality is covered.

Commercial Auto

What is Commercial Auto Insurance?

Commercial Auto Insurance is a policy that covers vehicles that are used when conducting business. It can help cover physical damage and liability in the event of an accident when you or other employees are driving company vehicles on the clock.

Who needs Commercial Car Insurance?

If you use a vehicle for work purposes, or if you have employees who drive vehicles while they're on the clock, you should have Commercial Car Insurance. It’s just as important for a company that only has one or two company cars to have a policy as it is a large shipping and transport company that has dozens of drivers.

How much does Commercial Auto Insurance cost?

The cost of Commercial Auto Insurance can vary widely. Depending on your policy, you may pay anywhere between $50 and $200 a month for a policy that can include a limit of up to $1 million. It’s important to cater a policy to fit your needs and budget, which is exactly what a representative from DJM can do.

How does Commercial Vehicle Insurance work?

First, you choose a policy that works for your unique situation and your budget. Then, you pay a monthly fee that represents the amount of coverage you have. If there should be any damages to one or more of your company vehicles, or should you or one of your employees get into an accident, you can file a claim and be reimbursed. A policy can also help prevent your company from getting sued, should an employee become injured and require payments for medical supports and procedures.

What is the difference between commercial and personal insurance?

Personal Auto Insurance covers personal use of a vehicle for the people who are listed as drivers on the policy. If you get into an accident while conducting business, you may find that your policy doesn't cover the damages because personal and business policies are rated and priced differently. You could also discover that you don’t need commercial insurance for a small operation, but it’s best to check with a member of the DJM team to make sure you’re covered properly.

Workers Compensation

What is Workers Compensation Insurance?

In short, Workers Compensation Insurance protects workers on the job who sustain injuries or illnesses due to a specific work accident or over a period of time. It is a mandated insurance policy in the state of California that provides income, medical benefits, and rehabilitative services to ensure your employees receive financial compensation for medical care and income they lose while they aren't able to come to work. A quality policy can also help protect your business from lawsuits.

How does Workers Compensation Insurance work?

When an employee is injured or becomes ill, a claim must be filed by the company where the employee works with approval from the injured party. An insurance policy provides benefits to the injured party, but it also helps prevent your business from paying for medical expenses and lost wages out of pocket.

How is Workers Compensation calculated?

Most of the time, benefits are paid based on an average weekly wage. It is also based on the type of injury or illness they have. However, even if an employee is totally disabled, they will only receive a percentage of their total weekly wages.

How much does workers comp cost?

The cost of Workers Compensation Insurance varies depending on multiple factors. For example, the more employees you have on payroll, the more costly your policy will be. Your past claims history can also impact your total cost. It is best to contact a DJM representative to receive an accurate estimate that’s based on your specific situation.

Why do employers fight workers comp claims?

The main reasons why an employer may dispute a claim include:

  • Trying to prevent insurance premiums from increasing
  • Discouraging other employees from being tempted to file their own claim
  • Protecting the company's image

Pollution Liability

What is Pollution Liability Insurance?

Pollution Liability Insurance is a special policy that can fill in the gap that is left in many general liability policies. It protects businesses from unexpected pollution exposures, contaminated sites, and it can help cover the costs of property damage, bodily injury, and cleanup.

Is Environmental Insurance the same as Pollution Liability Insurance?

Yes! The two terms are used interchangeably. It is also sometimes referred as Pollution Coverage or simply Pollution Insurance.

How does it work?

Pollution exposure risks are first assessed to determine if a policy is needed, and if so, how much it should be and what it should cover. If hazardous waste emissions are present during the construction process, a policy can cover bodily injury to those on-site, as well as property damage and cleanup costs.

It is important to note that it does not cover intentional acts by the contractor. Only environmental impacts that were mistakenly made can be covered.

How much does it cost?

As is the case with most insurance policies, cost depends on a variety of factors. In this case, things like how the building is being constructed, existing pollution issues, and the job history of the contractor are just a few things that are taken into consideration. Premiums can start at $2,500, but limits can go up to $100,000,000, depending on the project and programs being used. Contractors pay a percentage of the premium amount. Talk to a DJM representative to get an exact estimate.

What does a Pollution Liability Policy cover?

A Pollution Liability Policy covers:

  • The contractor in case of things like gas leaks, unintentional hazardous material release, and more
  • The environment, if cleanup is needed

Commercial Property

What is Commercial Property Insurance?

A Commercial Property Policy covers the entire building, including its contents from things like fire, explosions, burst pipes, storms, theft, vandalism, and more, depending on the details in your policy. For example, earthquakes and floods typically aren't covered, unless you add them to your policy.

What does a Commercial Property Insurance policy cover?

A Commercial Property Policy covers everything inside the building, as well as the building itself. It can also include exterior fixtures, like fences and outdoor signs.

What does a Commercial Property Insurance policy not cover?

A policy isn’t likely to cover earthquakes, floods, windstorms, or hail, unless you add them to your policy. In addition, it doesn't cover financial losses due to customer or client issues, or workers compensation, both of which require separate types of policies.

Who is responsible for Commercial Property Insurance?

If you own commercial property, you will want to look into Commercial Property Insurance to protect your building and other fixtures on your property. However, if you lease a commercial space, you should also look into Commercial Property Insurance. Your policy isn’t going to cover the structure itself, since you don’t own it, but it can protect all of the assets you own inside the building.

How much does Commercial Property Insurance cost?

It's normal for Commercial Property Insurance to cost between $50 and $100 a month for most policy holders. However, costs can vary widely, depending on the building and the property being insured. Limits and deductibles can vary widely too. Make sure you talk to a member of the DJM team who can assess your needs and provide you with a free estimate.

How can we help you?

Let’s talk about your insurance needs. Connect with our team of experts to answer any questions and find the insurance that is right for you.

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