Insurance can be a great way to reduce the amount of risk involved with anything, and construction is no different. Many businesses begin with contracting the construction of their new building, and finding the correct insurance for your project can be a huge challenge. There are many different types of construction insurance, but listed below are the types of insurance policies that business owners need to be aware of before they begin construction work.
Builders Risk Insurance
While it might also be known as commercial/contractor general liability insurance or inland marine coverage, builders risk coverage ensures that the materials and structures are covered while they are under construction. This type of coverage is important because of events out of your control that can occur, such as inclement weather, vandalism, and even fire. Such disasters cause construction company site damage that could set projects back significantly. Builders risk insurance allows the project to be financially protected when these types of disasters occur.
Commercial And Contractor General Liability Insurance
This type of coverage is specifically made to protect businesses who contract construction work. It allows for liability protection in case of bodily harm or property damage that can come from faulty construction work. Many contractors and builders are required to have a minimum amount of liability insurance in some states to work on specific contracts. Researching if your contractor or commercial construction company already has liability insurance can be well worth your time to protect yourself from unnecessary risks on your property.
Contractor License Insurance
These types of insurance bonds allow for your protection and guarantee that the contractor, or construction company, can fulfill their role on the project. This type of coverage is designed to protect the public and any business partners from unnecessary risk. It also establishes credibility for the contractor. Contractor license bonds are typically offered by insurance companies to contractors to ensure that they can be trusted with the completion of any particular project. Hence, commercial construction companies benefit from obtaining this coverage.
Construction Bonds Insurance
Construction bonds are similar to contractor license bonds, except they apply to specific aspects of the construction project. There are many different types of construction bonds that can apply to different parts of a particular project. For example, a payment bond guarantees that the contractor can provide payment to subordinates and suppliers. Having these bonds for the important parts of your construction project can be a great way to minimize unnecessary risk in your project.
While prevalent in many workplace environments, workers’ compensation is essential in a construction setting as well. Construction can be hazardous for those working on site, and having the coverage for possible injury minimizes the risk of having to pay out-of-pocket for a catastrophic injury. This policy allows for the coverage of medical expenses, legal fees in case of a lawsuit, and even missed wages to the injured party. Besides being useful in case of an emergency, workers’ compensation is required by law in some states regardless of company size. Construction business owners learn about the workers compensation requirements to protect their businesses.
Construction can be dangerous. Having ways to minimize that danger can be beneficial in a long-term plan for your business. General liability insurance is a major benefit to seek in prospective contractors and companies to work with. Bonds are also an important part of insuring the compliance of contractors while working on your property, minimizing the risk of an on-site dispute. Workers’ Compensation is also integral to protecting your assets in the event of a laborer being injured, and having to be responsible of what happens on your property. All these types of coverage allow for minimized risk while working with a construction team for your business, which can allow for the smooth transition of construction work to establishing the grand opening of your brand-new business.