If your business is involved in construction work, having adequate insurance protection for construction-related activities is not optional. Your investment in materials, equipment and time – no matter how big or small the construction project is – is likely sizable. If a loss occurs, construction insurance can help protect your bottom line.
Why Construction Insurance Coverage Is Important
Before shopping for an insurance solution for your construction business, it can be helpful to consider why you need this type of coverage in the first place.
Your business assets could be at risk if your property or construction equipment is damaged, or if your company is deemed responsible for harming others or other people’s property. Construction jobs are also inherently dangerous, no matter how many safety precautions you take. If an employee is injured or killed on a construction job, a personal injury claim or lawsuit could cripple your operations.
Financing agreements and construction contracts will generally require you to have a minimum level of coverage for each project. Beyond your contractual obligations, which may limit your liability in the event your business is responsible for a loss, you may also need specialized coverages designed to limit your risk exposure due to natural disasters, vandalism or theft of equipment.
Types of Construction Insurance Coverage
Some common types of insurance products for businesses engaged in construction include the following:
- Contractor’s general liability
- Liability coverage designed specifically for plumbers, carpenters, electricians, handymen and more
- Contractor’s professional and protective indemnity
- Commercial auto liability for pickup trucks, dump trucks, cement mixers, flatbed trucks, bucket trucks, pump trucks and other types of construction vehicles
- Inland marine
- Builder’s risk
- Worker’s compensation
- Contractor’s pollution liability
- Management liability
- Surety bonds
- Electronic data liability
- Umbrella coverage
- Business owner’s policy, which combines several types of coverage
Your business might benefit from one or several of these coverage options, or it may need additional lines of insurance that are not listed here. A one-size-fits-all solution generally does not work well for purchasing construction policies; your coverages should be tailored based on the types of (and amount of) risks your business faces.
Finding Coverage that Meets Your Needs
It can be tough to know where to turn for business insurance advice and recommendations. But finding a trusted insurance resource for your construction business can help give you peace of mind knowing your needs have been addressed and your risks mitigated.
There are several ways to go about finding a knowledgeable and experienced construction insurance provider.
First, one of the most effective ways of sourcing information and assistance with buying insurance for your construction business is by asking others for referrals.
General contractors and others involved in construction likely have some experience (good or bad) with certain insurance agencies and professionals. But, you can also ask anyone involved in the construction industry for referrals. Banks and finance professionals, workers in local government permit offices and real estate professionals may all be able to recommend options for you to consider.
Don’t overlook the agency that provides your other insurance needs, either. If they don’t provide insurance solutions specifically designed for construction risks, they should be able to provide referrals to other trusted professionals serving your community’s insurance needs.
2. Online Reviews/Testimonials
In today’s digital economy, you can also find reviews or client testimonials online for all types of businesses – including insurance companies and agencies – with just a few mouse clicks.
In addition to reading reviews on social media pages for the insurer or agency, you can also visit sites like rating agencies A.M. Best, Fitch, Moody’s and Standard & Poor’s to evaluate insurance companies’ financial strength.
3. Do Your Homework
Getting referrals from trusted resources and evaluating insurers’ strength are important, but it’s also important to do your homework on the insurance agency you are considering working with. Check with your state insurance department to determine whether the state has taken any disciplinary action against the provider you are considering working with.
Evaluate the agency’s website to get a feel for the products and services they offer, and ask them about how they have helped other similarly situated businesses with their insurance needs.
Choose an Insurance Solution that Accommodates Your Business Needs
Many insurance agencies and individual producers offer insurance for businesses in the construction industry. However, don’t make the mistake of thinking every insurance professional offering construction insurance is equally qualified to do so.
When you’re looking for construction insurance, choose a business that can help you with complex construction needs including project-specific coverages, liability protection, inland marine solutions and surety bonds. Look for an insurance business that has a deep understanding of, and experience in, the construction insurance industry, including knowledge of state and local jurisdictional knowledge of construction requirements and laws.
Coverage options and premiums will vary from company to company. Working with an agency that specializes in business insurance solutions can help you sort through the choices and make informed decisions.
At the end of the day, choose an insurance provider you feel you can trust to provide the protection your business needs. The potential risks are simply too great to leave your insurance coverage to chance.