The construction industry is volatile and full of risks, which is why it is highly recommended to invest in construction project insurance. While there is not just one type of insurance under this umbrella, it is necessary for a firm or contractor to understand the number of policies they will need to purchase in order to create a financial barrier in case of damages suffered. This blog will address the different kinds of construction project covers you need to know about.
General Liability Insurance
General liability insurance is mandatory in many states for construction companies to safeguard the safety of the workers, owner, and project as a whole. The construction project insurance makes provision for damage to the property, machinery, owner, and workers due to natural and unnatural circumstances as mentioned in the policy’s terms.
Professional Liability Insurance
During the progress and completion of a job site, one has to make room for a course correction of mistakes. Professional liability insurance helps contractors pay for the repair and correction of such errors in value engineering or design on the job including modifications. Unlike general liability policies that make a provision for physical injury and or damage of the property, professional liability cover looks after the mistakes that can pose a financial effect on a job.
Pollution Liability Insurance
This kind of construction insurance is highly necessary and provides coverage if a construction film is liable for any type of pollution that may have occurred at the site. If a construction company brings fuel tanks or chemicals for equipment at a job site, there is always an underlying risk for spills and emissions that may harm the ecosystem of the area.
Business Vehicle and Commercial Auto Insurance
Even if a construction company doesn’t have a huge collection of vehicles they still possess vehicles that are tied to the construction business, make sure that there is a valid commercial auto policy by the company name. You can create a few coverage gaps by using a vehicle for business purposes while personally owning it. To avoid this from happening, it is hence advised for contractors to name such vehicles under the company name.
Contractor License Bond
Some US states and cities stipulate that contractors need to hold a license and permit bonds (surety bond) to make sure that the end gets the delivery of work completed as promised. This is a legally imposing contract that will make sure that the contractor pays for all the materials and labor used to complete the construction without imposing any further burden on the customer apart from the final selling price of the property.
Workers’ Compensation Insurance
Most of the US states need some type of workers’ compensation insurance to safeguard wage workers from losing their earnings and or medical aid due to injuries that may occur on the line of duty. Such construction project insurance also protects a firm from lawsuits associated with such injuries.
Now that you know the main types of construction project covers, make sure that you do your research and check the documents carefully before investing in the policies suitable for your construction job.