Who Needs Construction Insurance?

Construction insurance is a type of protection that helps pay for any covered losses to a structure (building or other). It’s critical for anyone who works in the construction industry to carry this form of coverage because all building projects face the risk of losses and damages due to mistakes and unanticipated events. This is true regardless of a structure’s size or how long it takes to build it.

Who Needs Construction Insurance?

Both individuals and small and large businesses who work in the building industry should acquire construction insurance. More specifically, the following types of workers need this type of protection the most:

• Carpenters
• Electricians
• Landscapers
• Appliance technicians (including HVAC technicians)
• Handymen
• Drywall installers
• Masons and welders
• Painters
• Plumbers
• Roofers
• Tile, stone, and flooring installers
• Excavators
• Concrete contractors
• General contractors
• Lawn care workers

All of these professionals face the risk of damaging the property they work on. Therefore, construction insurance can help them avoid paying large sums out of pocket when losses and damages occur.

Legally Required Types of Construction Insurance

By law, you’re required to obtain four distinct types of construction insurance if you work in this industry:

General liability insurance

This type of coverage shields you from accidents that frequently happen at construction job sites. Common examples include incidents involving property damage, bodily injury to third-party entities, and personal injury (e.g. slander).

Workers’ compensation

Also called “workers’ comp,” this form of protection helps you in the event that one of your workers falls ill or becomes injured during a construction project. In these cases, your policy will typically pay this individual’s wages and/or medical expenses.

Thus, you can avoid being sued by your workers. If your business has no employees, you may not be required to obtain workers’ comp. However, be sure to check your state or local area’s requirements.

Third-party liability

Third-party liability insurance shields clients from claims that you may potentially file against them as a contractor. Similarly, subcontractors must cover any contractors they work for by providing third-party liability insurance. This ensures that the professionals working onsite are the only ones who can be held liable for errors.

Auto insurance

If any of your employees need to drive for their work, you must verify that they have current commercial auto insurance. A standard policy generally includes collision coverage, property damage coverage, and bodily injury coverage.

Some business auto insurance policies include third-party liability coverage, so be sure to consider this. Common examples of optional construction insurance coverages include additional insured, flood insurance, and terrorism coverage.

Types of Construction Insurance for Builders

If you’re a builder, there are two primary types of construction insurance (aside from general liability coverage) you should consider purchasing:

Builder’s risk insurance: Also known as “course of construction” (COC) insurance, this type of policy protects you from “named perils” and covers both the building you’re working on and the materials and other equipment you use. Commonly covered perils include explosions, fire, vandalism, theft, and weather-related events.

Professional liability insurance: Also called errors & omissions (E&O) insurance, this protects you (if you’re a designer-builder) in the event that one of your construction projects has a design error.

Cost of Construction Insurance

Premiums for construction insurance typically vary depending on the insurer as well as several other factors, including:

• Your business’s size
• Your business’s location
• The type of construction work you perform
• Your desired limits and deductibles

According to howmuch.net, however, the average annual cost of general contractor insurance is $1,090 ($90 per month) for policies with $1 million limits. Meanwhile, premiums for builder’s risk insurance are generally 1 to 4% of a project’s total construction cost, per CoverWallet.

Get Construction Insurance From JMG

Reach out to the professionals at JMG Insurance Corp for more information on who needs this kind of coverage. Since 1916, we have been committed to providing high-quality insurance solutions to clients throughout Connecticut, New Jersey, New York, Hawaii, and Massachusetts.

If you’re a builder, contractor, or any other type of worker in the construction industry, you will benefit significantly from acquiring coverage. Our policies include coverage areas such as builder’s risk insurance and general liability insurance.

The former coverage protects the buildings you work on from vandalism, theft, and storm-related damages, while the latter shields you against faulty workmanship, job-related injuries, advertising injuries, and defamation.

Construction insurance will also allow you to earn more contracts while keeping your construction staff safe, regardless of how many workers you employ. Call JMG Insurance Corp today at (844) 416-1688 or contact us online to learn more about our policies or to request a free insurance quote.