Types of Construction Insurance

If you are a building contractor, one of your biggest fears is on-site accidents. Your employees, neighbouring structures and the building under construction are exposed to an array of risks ranging from machine accidents to total collapse of the structure. It is therefore critical for contractors to seek construction insurance services. Below are a few types of construction insurance that a contractor should consider. 

General liability insurance

General liability insurance is one of the most common construction insurance policies. General liability insurance covers the following:

1. It covers bodily injury claims in case somebody is injured while on the premises. If the person moves to court, the insurance company will pay him or her any compensation awarded by the court. It is important to note that general liability does not cover your employees.
2. If you cause damage to property during a construction project, the insurance company will pay up any claims resulting from such accidents. However, it does not cover damage to the property you are building.
3. General liability insurance covers claims arising from faulty products. For instance, if an faulty sink causes bodily harm to someone, the insurance company will pay for medical expenses.

Workers' compensation insurance

Your employees are exposed to a variety of risks while working at the site. Even with protective clothing, they may suffer injuries while operating machinery or falls due to the nature of their work. Workers' compensation insurance covers the employee's medical expenses and lost wages while in the hospital. The policy also covers legal fees in case the injured employee sues your business.  

Public liability insurance

The policy exclusively covers personal injury, death or damage to property during construction projects. It covers third parties such as clients or the general public and not your employees. It covers legal fees in case the affected person takes you to court and any consequential losses resulting from the accident. 

Builder's risk insurance

This insurance policy covers the building under construction. It covers the structure, equipment and materials on site. It is vital to inquire what risks the policy covers. For instance, it may cover fires and storms but not earthquakes. 

Umbrella policies

An umbrella policy is suitable for contractors who have large projects. It is a general liability policy that allows the contractor to add other liabilities that he or she would want included in the policy. For instance, the cover can have an aspect of employer's liability and commercial auto claims.

The leading insurance policies that contractors should consider are general liability insurance, workers' compensation, public liability, builder's risk and umbrella policies.