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Disability Insurance for Contractors

Purchasing disability insurance for someone who does any physical labor can be somewhat of a challenge. Buying disability insurance for contractors is no different.  We help contractors find the best short or long-term disability insurance for their needs.  If you’re a contractor looking for disability insurance, read on or contact us by completing the form on the left. Or, do both!

Disability Insurance for Contractors

Contractor is a generic term.  It can mean many things and, like an attorney or any medical professional, it’s used to describe someone who provides many different types of services. For this article, the term contractor refers to those in the construction business, notably General Contractors.

Looking at opposite ends of people who describe themselves as contractors, we find two types of people.

The Executive

Person one is the executive.  They normally own the company or at least have a “C-Level” title, such as Chief Executive Officer or Chief Financial Officer.

Their duties are exclusively managerial and most related to office professions.  Although technically in the construction industry, most of these individuals have no physical duties, limited travel, and are rarely on-site.

Because of this, someone classified as a contractor with executive duties is normally given a high occupation class.  Since occupation class directly correlates with the premiums you pay, disability insurance for contractors with these duties pay less for their policies than all other contractors.

The Handyman

On the other side of the spectrum is the handyman.  Small business owner, skilled tradesman, and primary worker, the handyman typically does everything.

From marketing the business to finding jobs, to sourcing supplies and completing the work, a handyman wears a lot of hats.  Therefore, this job classification is normally assigned an occupation class based on their skills or duties.

As with any construction job, the more physical the labor, the lower the occupation class.  Usually, a contractor doing most of the work will be on the lower range of occupational classes, due to the nature of their job.

This means they will typically pay more for disability insurance and be offered benefits fewer than a contractor who has little to no manual duties.

Everyone Else

For the rest of the contractor population, things get a little murkier.  Laborers typically have lower occupation classes, while Foremen or Supervisors normally have higher occupation classes. Other duties, such as Estimator or Engineer, can warrant even better occupation classes.

But what about the General Contractor with employees?

Purchasing disability insurance for contractors can be complex, but this group has the most moving parts and is different from insurance carrier to carrier.

Disability Insurance for General Contractors

For General Contractors who own the business, several factors go into what occupation class you’re assigned.

Disability insurance typically considers four key metrics when pricing the policy (outside of the actual benefit amount for which you’re applying). The companies look at your age, your gender, your health, and your occupation. As a General Contractor, how your occupation is classified depends on several factors.


Are you the owner of the business?  Our experience is that most of the General Contractors we help purchase disability insurance own the business.

For some disability insurance companies, the time you’ve owned the business directly affects your occupation class.  For others, it may play a role in other ways.

The good news is you may be eligible for a business owner upgrade. Like other professions, disability insurance for contractors allows the owners of the business to move up one or sometimes two occupation classes.  This can drastically reduce your premiums.

You need not be the sole owner, either.  Depending on the company, you normally must own at least 10-20% of the company to qualify.

Other criteria necessary to qualify for a business owner class upgrade normally includes a specific period of self-employment (2-3 years), an income threshold (which varies amongst carriers), and the exclusion of certain professions (which also vary).


Having employees can influence your occupation class if you’re a general contractor looking for disability insurance.  Typically, the more employees, the better; however, disability insurance for contractors can see improved occupation classes with a little as two.


Again, not all disability insurance companies weight these characteristics the same.  Having objective, expert advice in selecting the right company is critical. We help General Contractors buy disability insurance online.

Like having employees, the more income you net, the better.  Notice that the disability insurance companies will look at what you’re putting in your pocket, not the gross revenues of your company.

Since disability insurance, both long term and short term, is income replacement, that makes sense.  If you’re looking for a policy to protect your business, you must look for a business overhead expense policy.

Duties and Being “On-Site”

Having any manual duties will have a negative effect on your occupation class. However, you may have an “on-site” role that is mainly supervisory.

This happens frequently with smaller general contracting companies.  The business has a handful of employees and maybe subcontracts some of the highly skilled labor.  The General Contractor must be on site to coordinate these moving parts but does little by way of physical labor.

While not being eligible for the top occupation classes that the executive or the owner with minimal on-site visits would be, a General Contractor with more on-site duties but still very limited or no manual duties would still have a reasonable occupation class.


As you can see, disability insurance for contractors has a lot of moving parts.  Because of this, many disability insurance companies have contrasting opinions on how some professions are classified.

What’s important is that you work with an independent agency that specializes in disability insurance.  We know the nuances, the discount and upgrade programs, and the underwriting advantages to help you purchase the best disability insurance policy for your needs.

You can contact us by completing the form on the left or by simply calling.  We offer objective, expert advice on purchasing disability insurance online and over the phone, and we’re here to help.

About Raymer Malone, CFP®
About Raymer Malone, CFP®

Raymer Malone, CFP® is principal and owner of www.highincomeprotection.com, an online insurance agency that specializes in disability insurance.  Ray has been in financial services since 1998 and has been life and health licensed since 2004. He started his company to help consumers get access to disability insurance products online and to provide them with the proper direction in selecting a policy. Ray resides in Lake Tahoe, NV with his wife and two children.

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