If you are a private contractor, you must opt for construction insurance. That said, every business needs insurance, but insurance plays a significant role in the construction industry. It’s because construction projects involve a unique set of risks that can severely damage your business if not covered by general liability insurance.
Moreover, not only contractors but also construction companies need general liability insurance. It can cover medical and legal fees if someone gets injured at the place of interest or someone sues you during the process. But depending on the nature of your work, you might also need additional insurance to meet those unique needs.
Additionally, different types of insurance focus on different sets of needs—for instance, a job in progress, construction materials, and equipment. The right kind of insurance will depend on your skillset, the type of work you do, and the site you perform it.
Here are three types of construction insurance you must know about when you are a private contractor:
- Commercial Construction Project Insurance
If you are a contractor that builds new homes or offices, you’ll need commercial construction insurance. It’ll give you the coverage for in-progress buildings, your business tools and property, and anything else you need in transit between different jobs. With construction project insurance, you address all the needs of the complex construction operations. Especially when you are working on multiple locations with high property values, construction insurance will ensure your and everyone else’s safety who is involved in the project.
- Builder’s Risk Insurance
Most individual contractors and construction companies need builders’ risk insurance. It covers temporary structures, buildings under construction (including the foundation), and every material on the site in temporary storage or transit. Moreover, with this type of insurance, you are protecting your construction company’s interests in the form and value of your property, equipment, and raw materials when they are in use. And to make things even more interesting, coverage of the insurance continues until the project comes to an end or the owner has signed off on it.
Additionally, with the builder’s risk policy, you get protection against rampant risks like theft, natural disasters, government actions, water damage, and mechanical breakdown. In some cases, insurers let you in on some additional benefits that are cost associated with functions like re-erecting scaffolds, site preparations, and even debris removal.
- Construction Equipment Insurance
With construction equipment insurance, a contractor gets protection for their most essential types of equipment. These pieces of equipment can range from cranes, front-end loaders, bulldozers, and other small and large construction equipment. But when you are opting for construction equipment insurance, be sure to check if there are any restrictions on boom length or weight of the load; in case there are, make sure the equipment meets all the necessary coverage requirements.
To Sum it Up
When you are a construction contractor, you know that there are a lot of risks involved. However, there are ways to deal with these risks and to make your job a lot easier. With construction insurance, you make sure you have a way to deal with any uncertainty that you may come across during or after the job.
