When a construction project goes wrong, the consequences can be devastating. Delays, cost overruns and disputes with vendors and contractors can quickly turn a promising development into a financial nightmare. But what if there was a way to protect your business from these risks?
Construction insurance policies provide a financial safety net in case things don’t go according to plan. This blog outlines policies and how they can be helpful for business owners.
Common construction insurance policies
Construction insurance is a particular category of insurance policies that can cover contractors, landowners and projects under construction. Today, different types of policies are designed to protect businesses and owners from specific losses.
- Builders risk insurance: It protects buildings during construction or remodeling from damages such as fire, theft or natural disasters. The project owner or general contractor can pay for this policy, which can cover all parties on the project.
- Workers’ compensation insurance: It allocates benefits to employees who sustained an injury or become ill due to their work. It covers medical expenses, lost wages and other related costs.
- Errors and omissions insurance: It safeguards professionals from claims of mistakes or omissions in their work. Also known as a professional liability policy, it protects workers should an individual or entity claim they made an error or mistake during the project.
- Subcontractor default insurance: It protects the policyholder from the risk of subcontractor failure. It can be valuable especially during large commercial or public projects, where project heads are often responsible for managing several subcontractors and sub-subcontractors.
Insurance coverage is available for almost any type of risk within the industry. While the state requires insurance coverage for specific construction projects, there are others that business owners can tailor to mitigate specific risks.
Protecting the interests of your business
When it comes to construction projects, uncertainty is always a factor. However, with the right insurance policies, you can protect your business from financial disaster. By understanding the different types of construction insurance available, you can make informed decisions about which policies to invest in – and how to use them to your advantage in contract disputes.