Just like any other line of business, insurance plays a crucial role in the construction industry. If you have been in this line of business before, you probably know the dangers that come with it in the form of bodily harm and damages to properties.
Even so, determining the type of insurance cover that you will need as a contractor can be overwhelming. Different factors come into play when determining the type of insurance cover that you will need for a certain business or project.
These factors include the type of entity acquiring the insurance cover i.e. whether it’s an individual or a business entity, the entity’s relationship to the actual project – whether the entity is a contractor, owner or subcontractor, and finally the magnitude and type of project being undertaken.
While these factors play an integral role in different types of insurance covers, this article will delve into examining different insurance policies available for contractors. Read along to find out.
Builders Risk Insurance
The course of construction or builders risk insurance is one of the most important insurance covers for any contractor. To that end, contractors insurance from Next Insurance seeks to cover buildings and any other structures that are under construction.
It is a vital insurance cover since it ensures that whatever you are working on can be paid for by the insurer in case of any form of damage.
Even so, different insurance policies have different ways of formalizing this type of insurance policy. Most of them have categorized different properties to be covered under this type of insurance cover to include foundations, materials, fencing, lawns, and many more.
Contractor Equipment Insurance
This is another important insurance coverage that every contractor should have.
It has over the years evolved since its inception as part of Inland Marine Insurance. This insurance cover is so wide and covers, not merely the construction industry, but other sectors as well.
Well, you may wonder how this insurance policy works. Basically, as the name suggests, this insurance cover applies to all the tools and equipment that are used by contractors and construction professionals to include:
- Different equipment and tools used by a contractor, contractor clothing, and supplies e.g electric saws, hammers drills, generators, among others.
- Mobile equipment used by contractors e.g. cranes, forklifts, excavators, loaders e.t.c
- Any construction equipment that had been borrowed or leased.
- Any computer equipment used for the construction to include computers and laptops, tablets, and many more.
General Liability Insurance
In a bid to ensure that you are well covered against any bodily harm, you should always ensure to have a general liability insurance cover. The good news is that this insurance cover not only offers coverage against body harm but damage to property as well.
While this might seem pretty much straightforward, it’s important to first scrutinize the type of general liability insurance you are taking as a contractor. This is because different insurance companies offer different versions of this insurance cover, depending on the policyholder.
Even so, you can rest assured that regardless of whether you are the owner of the project, contractor, or construction business, this insurance cover guarantees to protect you from any form of harm.
Another important thing to put into consideration is that you may be required by law in certain states to have a minimum liability insurance coverage in order to work on certain projects. This clearly shows the magnitude and importance of this cover for contractors.
Commercial Auto Insurance
Apart from accidents happening on-site, there can be eventualities and disasters that can happen in transit. While such incidents are often less common, they cannot be taken for granted.
Just as the name suggests, this is aimed at providing insurance cover for different vehicles that are used for transportation of items to be used for a construction project. Even so, this insurance isn’t exclusively used for construction projects alone. It can also be used for different businesses.
Basically, commercial auto insurance is intended to ensure that policyholders minimize any form of repair costs on their vehicles, avoid any high medical costs and lawsuits that may come as a result of vehicle accidents.
Just like any other standard auto insurance policy, there are different factors about the commercial auto insurance policy that are quite alike. They include:
- Liability coverage: This is a coverage that protects both the employees and the contractor from any damages that may arise from accidents.
- Physical damage coverage: Once a vehicle is involved in a collision, this cover will take care of all the expenses used to repair the vehicle.