Insurance Requirements for Property Preservation Companies and Contractors

Insurance is a non-negotiable requirement for property preservation companies. Clients — mortgage servicers, asset managers, and national preservation companies — require proof of insurance before assigning work, and the required coverage levels are often higher than other contractor trades. Understanding what you need, what it costs, and how to maintain compliance keeps your business eligible for contracts.

Required Coverage Types

General Liability Insurance

General liability covers third-party bodily injury and property damage claims. Most preservation clients require $1,000,000 per occurrence and $2,000,000 aggregate minimum. This covers scenarios like a crew member accidentally damaging a neighbor's fence or a passerby tripping over equipment. Expect to pay $1,500-4,000 annually depending on revenue and claims history.

Workers Compensation

If you have employees (not independent contractors), workers compensation insurance is required by law in almost every state. Preservation work is classified as a moderate-risk trade, so rates are higher than office work but lower than roofing or demolition. Even if you only use subcontractors, some clients require you to carry workers comp or verify that your subs carry their own.

Commercial Auto Insurance

Preservation work requires driving between properties daily, often hauling equipment and debris. Personal auto policies do not cover commercial use. Commercial auto insurance covers accidents, cargo, and liability while vehicles are being used for business purposes.

Maintaining Compliance

Most clients require updated certificates of insurance (COIs) annually, and many require additional insured endorsements naming the client on your policy. Set up automatic COI distribution with your insurance agent, and track expiration dates — lapsed insurance can trigger immediate work suspension and loss of vendor status.