What is a significant risk for contractors not carrying necessary insurance?

The significant risk for contractors not carrying necessary insurance is personal financial liability for accidents or damages. Without the protection that insurance offers, a contractor may be held personally liable for any accidents that occur on the job site, damages to property, or injuries sustained by employees and third parties. This could result in substantial out-of-pocket expenses that could jeopardize the contractor's personal finances and the viability of the business itself. Insurance acts as a safeguard, allowing contractors to manage risks associated with their work and providing a safety net for unforeseen circumstances.

Additionally, while loss of clients and difficulties in bidding for contracts can occur without insurance, the immediate and potentially devastating impact of personal financial liability emphasizes the importance of having appropriate coverage in place. Contractors rely on insurance not just for compliance with legal requirements, but as a fundamental part of their risk management strategy.