Essential Insurance for Construction Projects: Key Points to Know
No matter the size of your construction project, it's likely more complex than it seems and may come with a range of risks and hazards. From unexpected damages to potential on-site injuries, a variety of things can go wrong during a project. Thankfully, there's construction insurance that can help protect your business, employees, and your clients.
Here are the five essential types of insurance policies every construction company should consider.
1. General Liability
Obtaining general liability coverage is must before taking on a construction project. That's because policies can cover third-party claims for:
- Property damage
- Legal fees
- Bodily injury
For example, let's say you're working somewhere close to pedestrian traffic, and falling debris injures a passerby. General liability insurance can cover the costs associated with the accident. Without this much-needed protection, you could find yourself on the hook for paying for significant damages, including lawsuits or settlement costs.
As all policies are different, it's important to understand all the details of your coverage to ensure your business needs are met.
2. Workers' Compensation
The construction industry is high risk, and injuries can range from minor accidents to severe incidents. A comprehensive workers' compensation policy ensures that employees who are injured on the job receive coverage for medical expenses, lost wages, and rehabilitation.
Workers' compensation coverage is required in most states and doesn't only benefit employees—a policy protects your business from potential lawsuits and helps maintain the trust of your workforce.
3. Builder's Risk
Another insurance must-have is builder's risk, as it's designed to protect structures and buildings under construction. It can offer protection from a range of incidents, including:
- Storms
- Vandalism
- Fires
- Theft
Coverage can often be customized, allowing you to tailor the policy based on your project's specific needs and potential threats. As even the smallest incident can result in major expenses, builder's risk insurance should be one of the first policies you obtain for your construction project.
4. Construction Equipment
Buying the equipment needed to complete any type of construction project is a significant investment. Construction equipment insurance covers tools, machinery, and other essentials needed to get the job done and ensures you can replace or repair what's needed.
That alone can help keep your project on track and relieve the financial burden of replacing expensive equipment that can severely impact your budget and timeline.
5. Professional Liability
Professional liability insurance, also known as errors and omissions insurance, covers claims of errors or negligence. This type of insurance for a construction company could cover issues like design flaws or oversights in project management.
Should a client claim that your services caused a financial loss due to negligence, your policy can help cover legal defense costs and settlements. If you're a contractor offering design-build services, this type of coverage is essential.
Hoffman Hanono Insurance Has You Covered
As a full-service commercial insurance agency, we'll help you find the right coverage for your construction project at the right price. Protect your business, project and reputation by teaming up with Hoffman Hanono Insurance today—get a quote now!