Construction

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How Construction and Insurance Connect:

Few industries are as important as the construction industry. Construction workers, managers, and companies make it possible to do business, live, and get from place to place.

Construction can be a high-risk career path. From dangerous tools to dangerous heights, there are an almost countless number of ways one can get injured while performing construction work. While few industries take safety procedures as seriously as construction, accidents can and do still occur.

All construction companies need to purchase several types of insurance. To simplify the process, read on to discover the insurance policies most relevant to the construction industry.

Who Needs Insurance?

Every construction company will need to purchase several different policies. Depending on the type of construction your company does, you may be legally required to purchase certain insurance types as well. Regardless of the type of construction your company specializes in, you should consider buying insurance policies designed to cover your business, your workers, and your clients.

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CoverWallet's Insurance Checklist , you'll find a list of insurance types needed for your specific business or industry.

What Insurance Do Construction Companies Need?

The primary concerns for construction companies involve workplace injuries and property damage. The following insurance policies will help to cover these concerns.

Commercial Property

Insuring Business Property and Income:

Commercial Property Insurance is designed to insure your business property. This insurance covers the loss of commercial property on your premises for reasons such as fire or theft. This insurance policy will often cover the cost of income as a result of lost property.

You’ll Need This When…

You first open your business. Most construction companies own extremely expensive equipment. The loss of this equipment can occur starting on day 1.

For Example…

A break-in on your property could result in the loss of thousands of dollars in equipment. A Commercial Property Insurance policy will cover this instance and similar situations.

General Liability

Insuring Accidents at Your Business:

A General Liability Insurance policy is among the most common types of insurance for businesses. Some states and cities may require you to purchase General Liability Insurance as a prerequisite to obtaining a business license in construction. This insurance policy will cover two common concerns for your business:

  • Personal injuries that can occur on your property
  • Damage to the property of others by your company
You’ll Need This When…

Your business begins operations. While construction companies rarely have clients come to their physical offices, it is not uncommon for construction companies to accidentally damage property during normal business operations.

For Example…

If a worker accidentally scrapes a car on the street with a piece of heavy equipment, your company will be liable for the damage. A General Liability Insurance policy will likely cover this type of property damage.

Workers Compensation

Coverage for Injured Employees:

Construction workers are often at risk for on-the-job injuries. Construction companies should strongly consider purchasing Workers Compensation as a standard type of insurance. In most cases, your local or state government may require your business to hold a Workers Compensation policy due to the nature of the work.

You’ll Need This When…

You first begin construction work for clients. Even the smallest construction job could result in an injury for one of your employees.

For Example…

An employee who falls from a ladder while retiling a roof will qualify for Workers Compensation. If your business does not have this policy, that worker may sue the company for loss of income due to the injury. In most cases, he will be successful, drawing a payout directly from your business. A Workers Compensation policy covers this and any other injuries that are a direct result of performing work for your company.

Additional Insurance Types to Consider

Business Owners Policy

A Business Owners Policy, or BOP, is an excellent solution for construction companies that need to purchase both General Liability and Commercial Property Insurance policies. A BOP will cover the needs of both policies while minimizing the added paperwork required to hold two separate policies.

How Much Does Insurance Cost?

The size of your company, the number of employees and where you do business will all have an impact on the cost of your insurance. Get a quote to get a better idea of how much insurance for your company will cost.

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Commercial Property
This type of insurance protects your business’s physical assets, such as workspace and computers. It doesn’t matter if you work from home or lease your work space. Commercial Building and/or Property Insurance works for every business. The plans vary but are usually categorized by the kind of event that led to the loss. Fires and natural disasters are great examples of this. Plans can be customized based on location and business-type, so if you live in a flood zone, you can get additional coverage to protect your business, or if you run a business that has many physical records, it’s possible to get insurance coverage for that, too.
Business Owners Policy (BOP)
An insurance plan good for small to medium-sized businesses, BOP packages together elements of General Liability and Commercial Property. Depending on the carrier, a Business Owners’ Policy plan may include elements of Crime Insurance and EPLI.
Professional Liability
This insurance is great for businesses who offer advice to their clients. Professional Liability Insurance specifically covers a business from being liable should an error or omission occur, that leads to a financial loss for the customer.
Errors & Omissions (E&O)
This insurance provides a business with protection should a mistake have been made while delivering professional services. Your General Liability policy will not provide you with this level of protection, so if your company gives advice or provides contracting services you may need this insurance.
Medical Malpractice
Medical Malpractice coverage is liability insurance that protects physicians and other licensed medical professionals from liability associated with wrongful practices resulting in medical expenses and property damage, bodily injury, as well as legal costs related to patient claims.

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