What Kind of Construction Insurance is Needed for Small Businesses?

Construction insurance is necessary to mitigate your small business’s financial risk when working on construction-related projects. From workplace injuries to lawsuits, there is a range of risks that construction businesses in the construction industry have. This review discusses the different kinds of construction insurance your small business may need.

7 Types of Construction Insurance Policies Your Small Business May Need

Seven of the most common types of construction insurance policies small businesses in the construction industry should consider are general liability, builders risk, worker’s compensation, commercial auto, inland marine, pollution liability and contract works insurance.

Your small business may not require all of these policies, and you can customize your coverage by choosing an experienced and reputable insurance provider. In some instances, it may be a good idea to consider additional policies as well, such as umbrella insurance if you are working on larger projects and need coverage beyond your initial limit.

General Liability Insurance

General liability insurance covers you from costly claims made by third parties. These claims could arise for a number of reasons. Most notably, general liability insurance covers claims of:

• Property damage
• Bodily injury
• Reputational harm

For example, a client you work for may claim that you or a member of your construction crew damaged their property while you were working onsite. In this case, general liability insurance can cover the costs associated with the claim. General liability insurance covers most costs associated with claims of property damage and bodily injury, including but not limited to legal fees, medical expenses, repair or replacement costs and more.

Worker’s Compensation Insurance

Worker’s compensation insurance covers the lost wages and medical expenses for employees of your construction crew if they were to get injured while on the job. Worker’s compensation is required by law in many states. However, this policy not only protects employees, but it can also protect your business from lawsuits and medical costs related to any workplace injuries as well.

Builder’s Risk Insurance

Builder’s risk insurance, also called course of construction (COC) insurance, is a special type of construction insurance that protects your buildings, structures and materials from theft, storm damage and vandalism at the worksite during a project.

For example, if you have started construction on a new structure and a tornado comes through and severely damages the building, then builder’s risk insurance can cover the added costs associated with the setback. This may include replacing building materials, lost income related to delays in construction and more.

Commercial Auto Insurance

Any vehicle that is titled to your business can be covered through commercial auto insurance. This provides more specific coverage for your business’ vehicles than a personal auto insurance coverage would provide. If you have multiple company vehicles that are driven by several employees, then having commercial auto insurance is especially important to prevent high costs related to auto repairs, property damage, medical fees and more that you could otherwise be responsible for without a commercial auto insurance policy.

Inland Marine Insurance

Inland marine insurance protects your construction materials while they are in transport. However, the name can cause some ambiguity for many contractors. Inland marine insurance covers your materials while transported over land, whereas “marine insurance” would cover your materials if transported over water. This means you are protected if your construction materials and equipment were damaged while in transport to or from your construction site.

Pollution Liability Insurance

Pollution liability insurance protects you financially from third-party claims that state you were in violation of local, state, or federal environmental laws. Construction sites are often chaotic, and incidents could occur that lead nearby homeowners, businesses, etc, to believe you are in violation of environmental laws. If they were to file a lawsuit, then your pollution liability insurance could cover any related litigation and settlement costs.

How Can I Determine What My Construction Insurance Needs Are?

While the aforementioned coverages are most likely necessary for small construction businesses, you may not need certain coverages. There are also additional coverages that your company may benefit from, such as umbrella insurance when working on larger projects.

The best way to determine what your precise construction insurance needs are is to discuss all possible coverages with a licensed construction insurance agent. They can help you understand all of the risks involved and how you can best mitigate your risks with a personalized insurance policy.

JMG Insurance Corp Covers All of Your Construction Insurance Needs

JMG Insurance Corp provides insurance coverage to small businesses in the construction industry, protecting them from financial disaster caused by workplace injuries, claims of litigation, property damage, and much more. To learn more about construction insurance and start the process of customizing your small business’ own policy, contact the insurance professionals at JMG insurance or send us a message today.