When you’re a contractor, freelancer, or small business owner, your insurance is more than a piece of paper—it’s your safety net when something goes wrong. But here’s the catch: not every claim gets approved.

Having worked in the contractor insurance space for years, I’ve seen claims denied for reasons that could have been avoided with better preparation and awareness. At Bunker Insurance, we help our clients understand these risks upfront so they’re never blindsided when they need coverage most.

Let’s break down the top 5 reasons contractor insurance claims are denied—and how you can protect yourself from each one.

1. Incomplete or Inaccurate Information on Your Policy

When applying for insurance, every detail matters. Misstating your work type, revenue, or number of employees—even unintentionally—can cause your claim to be rejected later. Insurers rely on accurate information to calculate your risk, and discrepancies can be seen as misrepresentation.

Expert Tip: Review your policy annually and update it immediately if your work scope changes. At buildbunker.com, our application process is designed to be simple, accurate, and tailored to your contractor profile so you can avoid mistakes.

2. Lapsed or Expired Coverage

If your policy expires—even by a single day—your claim for work done during that gap can be denied. This is a common pitfall for busy contractors juggling multiple projects.

Expert Tip: Set renewal reminders well before your policy end date. Consider setting up automatic renewals with your broker so coverage never lapses.

3. Work Outside Your Policy’s Scope

If you take on a project that involves tasks not covered under your policy (for example, electrical work when your policy is for general carpentry), your insurer may reject the claim.

Expert Tip: Before accepting new work, check that it falls within your policy’s coverage categories. At Bunker, we specialize in tailoring policies so you’re protected for the jobs you actually take.

4. Missing or Insufficient Documentation

Claims often require proof—contracts, invoices, photos of damage, or incident reports. Without proper documentation, insurers can’t verify the loss or liability.

Expert Tip: Keep organized records for every project. Use cloud storage to easily retrieve documents when needed, especially if you’re working across multiple locations.

5. Excluded Losses

Every policy has exclusions—things it won’t cover. Common examples include intentional damage, certain types of subcontractor work, or damage caused by faulty workmanship.

Expert Tip: Read your policy’s exclusions carefully. If you’re unsure, ask your broker for clarification before an issue arises.

Final Word

Insurance works best when you understand it before you need it. By keeping your policy accurate, current, and well-documented—and knowing exactly what’s covered—you can prevent most claim denials.

At Bunker Insurance, we believe no contractor should be left in the dark about their coverage. If you want to review your current policy or explore better options, start here: buildbunker.com.