Protecting Your Livelihood: Proper Insurance for Construction Company Owners

Protecting your construction company with proper insurance is crucial to having long-term success in the business. As skilled as you may be in your job, there are always circumstances beyond your control. If something goes wrong on your construction site, you’ll want to protect your profits, staff, and investments through insurance policies. Here are common insurance policies that construction companies may receive quotes for.

Builder’s Risk Insurance

Construction sites are susceptible to sustaining damages because areas are exposed and unfinished. For example, fire alarms and sprinkler systems may not be in place when a fire begins. Builder’s risk insurance is a type of property damage insurance for buildings under construction that aims to mitigate potential damages such as those from a fire, high winds, explosion, or theft. An important distinction to make is that builder’s risk insurance only covers the structure and materials that will become part of the building once completed.

When planning your level of insurance for construction projects, you’ll want to look at the overall building costs and the anticipated project length. You’ll want to have coverage begin from the moment construction materials appear on the site and contractors can start work. The coverage will continue until whichever situation occurs first: the policy expires, the site is sold, or the site is occupied by tenants.

Typically, builder’s risk insurance does not cover complex perils such as earthquakes or flooding in a beach zone. Extensions may be made to the coverage, but that will require you to have a more in-depth conversation with your agent to discuss specific details within the insurance policy. Accidents and injuries on the job site aren’t covered by builder’s risk insurance which is why you’ll also want the next type of insurance as well.

Workers Compensation

Workers compensation coverage is not exclusive to the construction industry, however it is vital for business owners to get because of the nature of construction sites. Whether your employees are working with heavy equipment or toxic materials such as asbestos, you’ll want insurance for contractor risk on potentially dangerous construction work sites.

Should an employee fall sick or be injured on the job and not be compensated for their time away from work, they could sue the business. Workers compensation covers any court costs and settlements that may occur. This type of coverage is mandatory in every state, however the specific business insurance requirements vary for each state. Business owners will need to speak with their agents to determine which insurance policy is best for their construction site.

Commercial General Liability Insurance/Umbrella Insurance

Commercial General Liability Insurance (CBL) is a third-party insurance. In this situation one person, typically the senior person in charge of safety on the job site, is responsible for paying for the CBL. They become the first party in the policy while the insurance company becomes the second party. The liability insurance protects a third party, which may be the owner or upper-tier contractor should they be sued. Often lawsuits of this type are filed when there is a breakdown of the contract between owner, general contractor, and sub-contractor.

Along with general liability insurance, a construction company may want to look at having an umbrella policy. Such a policy can be purchased after other policies are in place. This particular general insurance takes effect when other policy limits are maxed out due to a large lawsuit. Construction sites have a lot of moving pieces and an umbrella policy protects you against large legal settlements which could otherwise be financially devastating.

Heavy Equipment Insurance

While builder’s risk insurance protects the building and its materials, heavy equipment insurance protects the construction company’s equipment being used on the job site. Heavy equipment is targeted by crime rings, and they know that construction sites are an easy place to steal from. Some tips to prevent theft include rendering heavy equipment immobile and placing company labels in visible locations. However, even if you are diligent with tracking your equipment, having heavy equipment insurance is necessary to protect your assets. Construction equipment is expensive and theft can put a construction project behind schedule.

Other Construction Insurance 

Other insurance for contractors may be necessary for your construction site depending on the scope of your project. Also consider pollution insurance, umbrella insurance, and commercial auto insurance in addition to the professional liability policies explained above. Whether you are protecting your building materials, staff, or equipment, make sure you are prepared when it comes to ensuring the longevity of your business.

Construction Business Insurance Coverage

Make sure you have the construction insurance coverage you need to protect your business’s bottom line with help from Allied Insurance Brokers. Since 1982, our construction insurance experts have delivered results-driven solutions to help drive efficiency through risk management, loss control and asset protection. Contact Allied Insurance Brokers today, and discover how we can lower the cost to your business, and strengthen your coverage while improving your bottom line.