Differentiating between the coverage you need versus the coverage that may be nice to have can prove challenging for some business owners. Fortunately, many property owners and project developers will advise construction companies on the type of insurance policies they should have in place ahead of starting a given construction project. But this not always the case. Regardless of the construction project that you are taking on, you should have the following type of coverage:
Contractor liability insurance
This policy protects your business against injured workers as well as property damage. However, there are some limitations when it comes to land value, material costs, and labor costs.
Builder’s risk insurance
The insurance pays for damages up to the coverage limit of your policy. However, there is a caveat in that the coverage limit must represent the full value of the structure, including material and labor costs associated with the construction project. Lastly, this policy does not cover the value of the land where the construction project is set to take place.
Whether it is the result of Mother Nature or a sewer backup, flood insurance covers damage to building materials, equipment, and much more.
Hold harmless agreement
This type of coverage offers protection against claims filed by other corporations or entities that may have a mutual interest in your construction project. It is important to note that the protection against liability relative to a hold harmless agreement can vary depending on where the construction contract is executed. Also worth noting, there are three types of hold harmless agreements, broad form, intermediate form, and limited form.
The policies detailed in this article only represent a few of the more common construction contractor insurance policies available and those that you should have in place before taking on any construction project. For help choosing the right type of coverage for your business needs or to get an instant insurance quote, consider filling out the attached form.