Insurance for Builders

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Why Builders Need Insurance

Whether you design and build houses or commercial buildings, buyers look to builders for a safe place to run their business or turn into a home for their family. Builders need insurance to protect themselves from unexpected incidents that can result in a lawsuit. Builders risk losing their business, personal assets, and destroying their reputation without the right insurance in place.

Builders within this industry design and build both single family and multi-family homes. For-sale builders maintain ownership of the land, while buyers will own the home. Other general contractors will construct and sell detached homes, townhouses, row houses or other types of homes that include the sale of the land. Companies building multi-family homes will typically build high-rise apartments, condominiums or even townhouse apartments.

Risks Builders Could Face

Here are your potential risks:

  • Advice Goes Wrong: One builders risk is giving advice to potential customers. Some builders make recommendations about types of materials to use. If the materials you recommend don’t hold up over time, they can cause deterioration or financial damage to the customer.
  • Third-party Injury: Visitors come and go from construction sites checking on the progress of the work completed. There are plenty of hazards that can cause falls or injury including equipment, materials, and unmarked danger areas.
  • Employee Injury: Builders work with equipment daily. When equipment is not maintained or properly used, employees can get injured on the job and leave you shorthanded.
  • Theft of Materials: Many construction sites are left unsecured at the end of the day. Anybody can walk in, pickup materials lying around, and leave with them. If that happens, you have to replace the equipment or materials to finish the job.
  • Fires: Fires are unpredictable and wreak havoc. When they occur to a partially constructed home or building, you have to start the project over, which is costly in regards to time and money.

In each of these builders risk scenarios, you are responsible for the negative outcome including medical expenses, costs to repair or replace, and costs to defend your business in a lawsuit.

Types of Coverage Builders Need

Every builder needs general liability and commercial property. You should also quote builders risk insurance. If you offer advice to customers, you also need professional liability insurance. Your need for work comp insurance depends on if you hire employees or contract projects to others.

  • General Liability: Covers the cost to defend a lawsuit when a third party holds you responsible for property damage or personal injury.
  • Builders Risk Insurance: Builders risk insurance protects buildings and homes still under construction. Types of covered builders risks include theft of materials or damage to the building that forces you to redo a portion or start the project over.
  • Commercial Property: This policy pays to replace equipment, materials, and your commercial building or office in the event it is destroyed by a fire, vandalized, or stolen.
  • Business Auto: Protects you from large out of pocket payments to fix vehicles (yours or a third party’s) when an auto accident occurs from your negligence.
  • Professional Liability: Protects you when your builders advice doesn’t work and causes financial damage to property damage.

How Much does Builders Insurance Cost

The average cost of builders risk insurance and other builders insurance policies depends on the insurance company. Builders insurance also depends on your experience, safety protocols, and what types of areas you are building in and companies will ask for this information to calculate an insurance cost for you. Request a quote for builders risk insurance online today by completing the form below.

What type of insurance does this industry need?

Policy What is it? Why get it Popularity in your industry Want free quotes?
General Liability
This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy. General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.

What is it: This policy protects your business in case of third party claims, such as bodily injury or property damage. For example, the common "slip-and-fall" claim would be covered by your General Liability policy.

Why get it: General Liability insurance is often considered to be the core coverage, particularly for businesses that regularly physically interact with customers or sell physical goods. In addition, many businesses have a contract, like a loan or a lease, requiring that they have this coverage.

Workers Compensation
Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work. Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.

What is it: Workers Compensation covers an employee's lost wages and the cost of resulting medical treatment if they suffer a work-related injury or disease. It also covers services needed to help the employee recover and return to work.

Why get it: Workers Compensation coverage is mandatory in most states. The number of employees after which it's required differs by state, but you will generally need coverage once you have employees.

Inland Marine
Inland Marine insurance covers goods in-transit either on land or through shallow water, as well as certain types of movable property (such as medical equipment). If your business has valuable equipment which regularly needs to be moved, then this can be a core policy to protect your property.

What is it: Inland Marine insurance covers goods in-transit either on land or through shallow water, as well as certain types of movable property (such as medical equipment).

Why get it: If your business has valuable equipment which regularly needs to be moved, then this can be a core policy to protect your property.

Commercial Auto
Commercial Auto insurance provides coverages such as liability, collision, comprehensive, medical payments and uninsured motorist coverage. Any vehicle on the road must be insured, and any incidents that occur while a vehicle is being used for business purposes may not be covered by a personal auto policy. That's why it is so important to make sure you have Commercial Auto insurance for any vehicles owned by the business.

What is it: Commercial Auto insurance provides coverages such as liability, collision, comprehensive, medical payments and uninsured motorist coverage.

Why get it: Any vehicle on the road must be insured, and any incidents that occur while a vehicle is being used for business purposes may not be covered by a personal auto policy. That's why it is so important to make sure you have Commercial Auto insurance for any vehicles owned by the business.

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