Commercial Building Construction

Commercial Building Construction Insurance Guide

Ann Herro | July 31, 2018
Engineers with blueprints at a construction site

Commercial building projects can range from the simple to the complex, and the risks you face change depending on the size, scope, and type of project. Whether you are working on an office building, stadium, hospital, apartment complex or some other type of project, you need reliable, flexible commercial building construction insurance that covers all of your risks, during every stage of the project. 

More importantly, you need an agent who understands construction and your unique insurance needs.

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Why Do I Need Commercial Building Construction Insurance? 

Commercial building projects are highly coordinated, long-term, large-scale projects that involve not just you and your business, but a variety of other contractors and subcontractors who all play a role in completing the project. Commercial building construction involves large exposures and a need for a flexible but well-coordinated insurance program that responds to each specific project and associated risk. 

In general, construction companies may experience financial losses due to:

  • Property theft, vandalism, loss, or damage
  • Lost income
  • Employee illness, injury, or death 
  • Liability claims 

Because of the diversity of commercial builders and construction companies and the work that they perform, not every type of commercial builder needs the same types or amounts of insurance. 

Your insurance program should be based on the size of your company, the number of employees you have, and the type of work you do. 

Your insurance agent should be accustomed to meeting the contractual requirements of the project owner, and all of the contractors and subcontractors that you work with. 

Liability Insurance for Commercial Building Construction

Most commercial building construction companies need liability insurance to protect their assets from the costs of claims for property damage and bodily injury, and any related lawsuits. 

Contractors general liability insurance protects you if your business is responsible for bodily injury or property damage to others. Be mindful that most construction firms need general liability insurance in order to obtain a contractor’s license.

General liability insurance provides coverage for a variety of liability claims, such as: 

  • Bodily injury
  • Property damage
  • Completed products
  • Faulty workmanship
  • Personal injury and advertising injury

If you own trucks or other vehicles, commercial auto insurance covers your owned vehicles and drivers in the event of an accident or other vehicle damage. Commercial auto insurance provides coverage for property damage and bodily injury liability claims, vehicle damage, and medical bills, as well as any costs related to lawsuits due to auto accidents involving your vehicles. 

Professional liability insurance (or contractors errors and omissions insurance) covers you if a client experiences a loss based on any professional services you have provided, such as design work or advice. 

You may want to talk to your independent insurance agent about your need for excess liability, or commercial umbrella insurance. 

Commercial umbrella insurance provides an extra layer of liability protection to any of several other liability policies you might have. Commercial umbrella insurance kicks in when the limits of your other applicable insurance policies have been exhausted, protecting you in the event that a claim exceeds the amount of coverage available from any other applicable policy.

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Property Insurance for Commercial Building Construction

Commercial building construction companies need property insurance that protects their business property (tools, equipment, construction materials, office space and furnishings, computers, etc.) whether it is in an office or warehouse, a showroom, on a job site, or in transit from one site to another. 

  • Commercial property insurance covers your office space, warehouse, and other buildings and their contents for losses due to fire, theft, vandalism, weather events, and more. 
  • Property insurance also typically includes loss of income coverage, or business interruption insurance. It reimburses you for lost income and helps pay for certain ongoing expenses if you are temporarily unable to operate due to a covered loss (fire, storm, etc.). 

Your commercial property policy only covers your tools, equipment, and supplies while they are on your premises (office, warehouse, showroom, or other covered location). You need additional coverage to protect all of your property while it is in transit and while it is at a job site. 

  • Inland marine insurance is another form of property insurance that protects your equipment, tools, portable computer equipment, building supplies, and any other tools or equipment from theft, loss, or damage while they are in transit to and from worksites. 
  • Builders risk insurance provides coverage for damage, theft, or loss of tools and equipment while they are at a worksite. It also covers structures that are under construction that are damaged by fire, wind, hail, vandalism, or other types of losses.

Workers’ Compensation Insurance for Construction Employees

Construction is dangerous work in which employees can be injured in any number of ways. Dangers are everywhere on a large commercial construction site. Keeping your employees safe from work-related injuries and illnesses is important for their long-term health and satisfaction, as well as your company’s financial viability. 

Workers’ compensation insurance provides coverage when accidents happen in the workplace. It ensures that the injured worker gets medical care and income protection while unable to work, regardless of who is at fault for the injury. Workers’ compensation insurance for construction workers can be complex. But if you fail to provide coverage as required, you may be subject to steep fines and other penalties. 

It’s important to get it right. An independent insurance agent can help you learn about the workers’ compensation requirements in your state. 

Can My Agent Help Me with Contractor Bonds? 

You may need a variety of contractor bonds, or surety bonds, for every project that you work on. Contractor bonds are essential for finding, securing, and performing work for many types of construction projects. They may be required by a project owner in order for your bid to be accepted, and they typically guarantee some aspect of the bidding process and the contract. 

There are a variety of different types of surety bonds, including bid bonds, performance bonds, payment bonds, license and permit bonds, and maintenance bonds. Every bond is unique and tailored to a specific project. 

Most insurance agents who have experience working with commercial building construction insurance can also help you secure the surety bonds you need for any project. 

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How Much Does Commercial Building Construction Insurance Cost? 

The cost of commercial building construction insurance is difficult to estimate. In fact, costs may fluctuate greatly over time depending on the number of projects you are working on and their size and scope. 

Your best bet is to work with an agent who specializes in commercial building construction insurance. An experienced independent agent will have access to insurance companies that have developed policies specifically for your type of business and the risks you face. And an experienced agent will be able to anticipate your exposures and find the right insurance products to protect your livelihood for the long term. 

Find and Compare Quotes

An independent agent can work with you one-on-one to determine the types and amounts of coverage you need. Your agent can get quotes from multiple insurance companies so you can evaluate the cost and coverage options and make the best choice. 

Benefits of an Independent Agent

Our agents simplify the search process for finding the right commercial building construction insurance. They’ll walk you through some handpicked policy options and explain the details.

Most importantly, they’ll be there for you when claim time comes. They know the ins and outs of the process and will make sure your claim is handled appropriately. 

The Lowdown on Online Quotes

Online quotes can be tempting. They are fast and easy to get—but are they accurate? And are you getting quotes for the right coverage? For business owners, choosing speed over accuracy can cost you. 

Online quotes can’t and don’t see the whole picture. They can leave out important coverage that will leave you devastated if something unexpected happens. And they can leave out cost-saving opportunities that an agent can help you take advantage of. 

Instead of getting an online quote, find an independent agent now, and get one-on-one consultation and affordable options for the best coverage for your unique needs. 

TrustedChoice.com Article | Reviewed by Paul Martin

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