Construction Insurance

Construction insurance helps manage potential risks and liabilities associated with building projects. Whether you are a contractor, subcontractor, project owner or other construction stakeholder, having the right insurance coverage is essential to protect your interests. Insurance designed for construction professionals can offer financial safeguards after accidents, property damage, injuries, design flaws, environmental hazards and other unforeseen events that can disrupt construction projects and lead to significant financial and legal consequences.

Understanding various construction insurance options and their roles is vital for ensuring project success, compliance with contractual obligations and overall risk management.

What Types of Coverage Are Included in Construction Insurance?

Construction insurance generally refers to select coverages tailored for the construction sector, and policies may include various coverage options. Coverage details may depend on a business’s size, location, work type and legal requirements. The following are some coverages typically available:

• General liability coverage may help cover medical expenses, legal fees, settlements and defense costs for lawsuits arising from third-party bodily injury, property damage, product liability and advertising-related claims.
• Professional liability coverage may help protect the construction business from lawsuits over errors and omissions.
• Commercial auto coverage may help cover company vehicles and drivers in case of accidents or damage to third-party property.
• Builders risk coverage may help cover damage to a construction project during its construction or renovation phase. It typically includes protection against damage caused by fire, theft, vandalism and certain natural disasters.
• Workers’ compensation coverage may help cover medical expenses and lost wages for employees who are injured on the job. It may also help protect the employer from potential lawsuits related to workplace injuries.

How Do Subcontractors Ensure They Have the Right Insurance Coverage?

Subcontractors can ensure they have the appropriate insurance coverage by first understanding the contract requirements and identifying the specific types and amounts needed. Consulting with a specialized insurance broker is crucial for finding cost-effective policies that meet these requirements.

What Are the Typical Insurance Requirements for Construction Projects?

Typical insurance requirements for construction projects encompass a range of policies to mitigate risks associated with construction activities. These commonly include general liability insurance, workers’ compensation, builders risk insurance, commercial auto insurance and professional liability. Project-specific insurance, performance and payment bonds, and environmental liability coverage may also be necessary. Compliance with these requirements, often outlined in contracts, safeguards project stakeholders, ensuring they are adequately protected against potential liabilities, accidents and financial risks throughout the construction process.

Contact Alan Insurance Services to discuss your construction insurance policy. We can make coverage recommendations based on your specific requirements.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.