General contractors, specialized contractors, homebuilders, remodelers, and even carpenters need to minimize exposure to risk with construction insurance customized to the hazards of the profession. The right blend of coverage can help you limit your financial risks due to jobsite injuries, equipment damage or vehicle accidents may occur during the course of your construction project.
Your construction insurance can make the difference between your company turning a profit or losing money on a construction project. It's important to make sure you have adequate and quality coverage. The specific coverage you choose will depend upon a number of factors, including the size of your company, the number of workers you employ, and the type of work you perform.
Some of the policies you may want to consider include:
A business owners policy, or BOP, is appropriate for some small business owners. If you have a small construction business, this kind of combined policy may be right for you, and may provide much of the construction insurance you need at an affordable rate.
Your business may qualify for a BOP if you generate less than $5 million in sales and have fewer than 100 employees. Your policy will typically combine the following coverage types:
For business and marketing reasons, most contractors get licensed even if it is not a requirement in their state. You will likely be viewed more favorably by the insurance companies and be able to secure better rates and pricing if you are licensed.
Beyond the construction training requirements, you will have to carry general liability insurance and workers compensation insurance. Some states will also require you to be bonded. This bond can be provided by some insurance companies.
The cost of your construction insurance will differ based on how many employees you have, what kind of construction work you do, and how much work you generate. Companies that develop raw land and construct higher value projects will pay the most.
Normally, you will pay a percentage of sales as your premium with a percentage upfront, and then make monthly payments after that.
Here are some of the businesses that participate in the construction trade that can benefit from construction insurance.
As a contractor, you take on risk of property damage, employee injury and vehicle accidents. You are exposed to the risk of bodily injury or property damage to third parties. With the right business insurance in place, you can minimize the risk and liabilities that can steal your profits.
It's a good idea to comparison shop before you buy. Make sure you're working with a highly rated insurance company (you can check this with rating agencies like A.M. Best). It's also a good idea to collect at least 3 rate quotes on similar coverage before you buy. This way, you can see your options and choose a business insurance policy that's competitively priced, but has all the aspects you need to be protected on the job.