How to Obtain More Contractor Customers
March 24, 2021
Insurance agents are experts in understanding market trends and classes of business that are on the rise. Over the past year residential and commercial construction has boomed, with the industry seeing an increase in projects started of 7% compared to the previous year. Due to an increase in demand and a saturated market, we foresee the growth in the construction industry continuing in 2021.
So how does this affect insurance agents? Most contractors need high limit liability insurance, workers compensation insurance and surety bonds in order to operate their businesses. Based on the class of business, some of these products can be very difficult to obtain. This provides insurance agents with a unique opportunity to leverage their expertise to assist contractor clients in obtaining the necessary insurance and bonding. In this week’s blog, we break down how insurance agents can effectively market themselves to contractors, and establish long lasting relationships with their clients.
How can Insurance Agents Find Contractor Customers
Many states have public databases showing active contractors in the state. Our state by state contractor license guide contains links to all of these databases. If your state does not show active contractor information to the public, consider contacting the Secretary of State’s office or a list service company to obtain this information. If you’re willing to do a bit of prospect research, a simple google search can help you easily track down potential customers.
How Can Agents Solicit Business From Contractors?
So now you have your list of prospective clients, but how do you effectively sell them your services? Well for starters, you need to make an introduction. Direct mail is a great way to convert leads into customers. Consider sending contractors a well designed marketing flyer or information pamphlet highlighting your services. You can leverage your personal touch and stellar customer service to set you apart from your competition. Drop by the contractor’s office and introduce yourself, as this can help solidify a solid first impression.
Additionally, having a strong digital presence and SEO marketing strategy helps ensure that contractors will find you organically.
What Insurance Products do Contractors Need?
Most states require contractors to obtain a license prior to conducting business operations. As a prerequisite to obtaining a license, contractors will need to purchase surety bonds, liability and workers’ compensation insurance.
Contractors will need to purchase a surety bond prior to obtaining a contractor license. Each state has their own unique bonding requirements, so make sure to check out our state by state guide mentioned above for your customer’s specific needs. Additionally, contractors will need to purchase bid, performance and payment bonds when contracting on state or federally funded projects.
The liability insurance requirements for contractors can range from anywhere between $50,000 to upwards of $1 million. Even if there is no state law mandating liability insurance coverage, most reputable contractors will seek to obtain this insurance anyway. We do not not issue any form of liability insurance at BondExchange, but our agents often utilize brokers on these lines. A list of brokers in this space can be found here.
Workers’ compensation insurance provides benefits to employees of the contractor who are injured in the line of work. Some states have state-run workers compensation funds and compete directly with private insurers.The following states have state-run workers compensation funds:
- New Mexico
- New York
- Rhode Island
Other states have monopolistic state workers compensation funds and require consumers to purchase workers comp coverage from them. The following states require this coverage to be purchased from state funds:
- North Dakota
- West Virginia
How Can BondExchange Help Insurance Agents Obtain More Contractor Business?
At BondExchange, surety bonds are our only business and insurance agents are our only customers. Unlike other brokers, we do not compete with you for retail business, which puts us in a unique position to help elevate our agents’ book of business. Enroll in our system today to give your agency a leg up against the competition.