As a contractor or construction company, understanding the necessary insurance requirements is crucial to protect your business from potential liabilities. Here are some of the key insurance policies contractors and construction companies typically need:
General Liability Insurance This policy covers damages and injuries to third parties, including clients, customers, vendors, and the general public. It can help pay for legal fees, medical expenses, and damages resulting from accidents or injuries that occur on a job site. General liability insurance is the most critical policy for contractors, offering the broadest range of coverage variables.
Workers’ Compensation Insurance Required in most states, this policy provides benefits to employees who are injured or become ill on the job. It covers medical expenses, lost wages, and rehabilitation costs. Workers’ compensation is often the most costly policy for subcontractors, making cost control measures essential.
Commercial Auto Insurance If your business uses vehicles for work purposes, commercial auto insurance is necessary to cover accidents and damages. Effective fleet safety strategies are critical to help manage the cost of this coverage.
Professional Liability Insurance Also known as errors and omissions insurance, this policy covers claims of negligence or professional errors that result in financial loss for clients. It is particularly important for architects, engineers, and construction management professionals. Contractors performing design-build work also require this coverage.
Builder’s Risk Insurance This policy protects against damage to a building while it’s under construction. Coverage typically includes theft, vandalism, and natural disasters.
Umbrella Insurance Providing additional liability coverage beyond the limits of other policies, umbrella insurance is considered a best practice for contractors with significant assets or those operating in high-risk industries. This coverage is often required by project owners or general contractors.
Inland Marine Insurance This coverage protects contractors against a variety of risks, including damage or theft of equipment and tools, loss of building materials prior to installation, and coverage for leased or rented equipment.
Working with an insurance broker who specializes in contractor and construction company insurance is essential to ensure your business has the appropriate coverage. A knowledgeable broker can help assess your risks and recommend policies that fit your budget and needs.
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