Post Menu and Details.
- General construction liability insurance
- Professional liability insurance
- Pollution liability insurance
- The course of construction insurance
- Commercial auto/truck insurance
- Final thoughts
Reading time: ~4 minutes
It is common knowledge that the construction industry has inherent risks due to the nature of the business. Job sites are often crammed with activity and workforce operating heavy machinery. All of this and many other factors bring about various risks that you need to have insured if something goes wrong.
Even though the newest tech innovations and machines alleviate some of the risks, new risks occur now and then, and there is no way to ensure a 100% safe work environment with zero accidents.
That is why it is only reasonable to get proper insurance. So take a look below and learn more about the types of construction insurances you can use.
General construction liability insurance
General construction liability insurance is something that should be a prerequisite for all businesses out there.
Construction liability insurance protects a construction company from certain risks and liabilities. These often include claims of injury and various medical expenses that can add up quickly.
On top of that, this type of insurance for construction companies also keeps a business safe from claims that arise due to damage caused to a customer’s property or by a product that the company has installed (poor plumbing or bad sockets and wiring).
Keep in mind that general liability never covers damages that occur as a result of professional negligence! If you want to cover that too, you will need another type of insurance.
Professional liability insurance
We all make mistakes sometimes. After all, we are only human. But there is no reason to worry because there is a kind of insurance that covers human error.
Professional liability insurance is designed to cover errors in value engineering or design on the job or certain changes in the shop that can lead to bigger issues with a project.
Contrary to general liability coverage (which covers property damage and/or physical injury), this covers those mistakes that can affect a project financially. However, it is not designed to cover the expenses of renovations or rework but just the liability of a certain error.
All in all, this type of insurance can come in handy for various construction business types. So, keep it in mind once you start thinking.
Pollution liability insurance
This is something that all construction businesses should expect. Pollution liability is inevitable, and it needs to be addressed accordingly.
You can do that with a good pollution liability insurance plan that covers situations where a business is responsible for pollution which happens at a job. For example, if you often bring fuel tanks or chemicals onto a job site, it increases the risk of potential pollution.
Keep in mind that the vast majority of general liability policies (purposely) exclude pollution liability. However, you can add an endorsement to provide some additional coverage.
These endorsements dealing with pollution usually provide considerably less coverage than a separate pollution liability policy. It would help if you had this in mind because it is often safer to purchase a different plan designed only for pollution than to add an endorsement.
See if you can combine one policy with another and think about the degree of coverage you need before deciding.
The course of construction insurance
Construction (COC) insurance (also known as Builders Risk insurance) is insurance coverage designed for structures and buildings still in the construction stage. Other kinds of policies (such as commercial property insurance) similar to this one usually don’t cover structures while in the construction stage.
These are the most common options to consider with COC policies:
- Fencing, paving, and outdoor fixtures
- Trees, lawns, as well as plants installed by the company
- Temporary structures (scaffolding)
- Building materials
Additionally, insurance companies generally make sure to cover the most common types of construction projects. These include commercial property construction, model homes (and their contents), and residential remodelling or smaller projects.
Finally, keep in mind that if your structure type is unique, various providers offer insurance policies for the specific project you’re working on. Even though these policies cover the most basic risks, some also protect against various other types of damage.
The most basic policies of this kind cover damage caused by weather, fire, and vandalism. Still, it is possible to negotiate a more advanced package with additional features tailored to your needs.
Commercial auto/truck insurance
Commercial auto insurance is designed for construction projects and is also intended to offer insurance to vehicles that companies use.
This policy helps policyholders avoid lawsuits, medical expenses, or costly vehicle repair due to traffic accidents.
Keep in mind that you can use a few options for commercial car insurance policies that resemble the coverage options of standard car insurance plans.
This option most often includes:
- Medical payments coverage – designed to help a business pay for injury-related expenses resulting from a covered incident; these include hospital fees, medical bills, ambulance costs, and more.
- Uninsured motorist coverage – covers damages and injuries which are caused by drivers who are. This is very important since your personal liability coverage is designed to cover damages and injuries caused by you to others.
- Liability coverage – protects the company and employees from expenses linked to accidents caused by employees.
- Physical damage coverage – covers damages to company vehicles after a collision. It can also include comprehensive coverage, which protects against stolen vehicles, damage from vandalism, or natural disasters.
It is important to have a commercial car policy no matter the type of vehicles you have at your own company. However, remember that most policies do not cover accidents that happen when a person linked to a company experiences an accident in an insured vehicle performing a drive intended for personal purposes (vacations, holidays, personal trips, etc.).
Construction companies inevitably experience unique risks that most other business types never have to deal with. But that should be the sign to implement different layers of protection to keep the organization safe and sound.
So, sit down and determine your insurance needs according to your construction business’s type. Then narrow down the risks and get insured as soon as possible.
Thank you for reading!