Construction Insurance

There are many different types of insurance designed to protect property owners, developers, and contractors through the various phases of a construction project. In fact, certain types of construction insurance policies are required for many projects.

Many factors dictate the type of construction insurance coverage one would need for a given project or business. These factors include, the person’s relationship to the project (contractor, property owner, subcontractor, etc.), the type of entity buying the insurance (business or individual), and the type of property to be covered.

Type of Construction Insurance

1. Builders Risk (Course of Construction) Insurance
2. Commercial and Contractor General Liability Insurance

Builders Risk (Course of Construction) Insurance

Builders risk insurance, also known as course of construction (COC) insurance, or sometimes construction all risk insurance, is insurance coverage for buildings and other structures while they are under construction. More specifically, the insurance policies will usually have options to cover the following types of property:

• Building materials
• Foundations
• Temporary structures such as scaffolding
• Paving, fencing, outdoor fixtures
• Lawns, trees and plants installed by the builder

Additional coverage considerations to include

• Installation Floater
• Debris Removal
• Soft Costs
• Liability
• Testing & Commissioning
• Vandalism
• Fire
• Weather (earthquake, flood)

Commercial and Contractor General Liability Insurance

General liability insurance, sometimes called commercial general liability (CGL) insurance or contractor / sub-contractor insurance, is a class of insurance that provides liability protection to businesses in the case of bodily harm or property damage during the course of business.

General liability insurance policies will usually cover a broad range of damages, including: faulty workmanship, job-related injury, advertising injury / defamation.

Who needs it?

If you are in a construction business you should always have commercial insurance. In most instances, you will be required to show proof of insurance before starting any work. Example of trades: excavation, home improvement, land clearing, remodeling, home building, asphalt laying, welding, sprinkler installation, parking lot striping, fence & deck building, concrete laying, stone & granite work, roofing, windows & siding, …

How much does it cost?

The different trades that do construction work are exposed to different types and degrees of risk. This variety of exposure is one of the many factors used to calculate a business’s construction insurance cost.

For example, an excavator might risk damaging underground water or power lines, while a roofer might risk falling from a roof or ladder. Those are different kinds of risk, so you could expect their insurance rates to differ.

Other influences on your rate include your coverage needs, employees, work vehicles and claims history. The only way to know your exact rate is to get a customized quote.