Secure Your Construction Business’s Future With Insurance Coverage
Approximately 45 years ago, a construction accident claimed the lives of 51 workers in America. An under-construction scaffolding system collapsed, sending these workers tumbling to their deaths 170 feet below. As a result, multiple lawsuits, liability settlements, and workers’ compensation cases followed.
It led to hefty fines against the construction companies and contractors. Since this deadly incident, the need for construction insurance has changed forever. If you are planning to start a construction business, you should keep insurance as your priority.
According to Forbes, construction mishaps occur due to explosions, equipment malfunctions, falling debris, slip-and-falls, welding accidents, and more. Hence, the common injuries include property destruction, broken bones, burns, brain injuries, etc. Most construction accidents have legal repercussions that can cost you millions.
Hence, it is crucial to invest in insurance coverage for construction companies. In this blog, we will discuss specialty insurance for your construction business.
The Risks In The Construction Industry
Statistics suggest that the construction industry contributes significantly to the American economy. The companies create infrastructure and buildings worth USD 1.8 trillion. However, the industry has a volatile and complex ecology that puts your property and workers in danger.
Your workers must juggle resources, coordinate, and access technical details to perform their duties. Moreover, your firm can have supply chain interruptions, weather-related setbacks, material shortages, etc. One mistake can cost you thousands, if not millions.
Faulty equipment, negligent behaviors, inadequate planning, and substandard accident prevention can lead to various lawsuits. According to Securance Corporation, natural disasters can also result in revenue losses and claims from injured employees. Therefore, these hazards emphasize the innate need for a tailored insurance solution.
The construction sector is susceptible to market fluctuations. That means the premium costs, deductibles, and policy wording can change over time.
3 Main Types Of Insurance Coverage For Your Construction Company
The political, regulatory, economic, and environmental changes solidified the construction insurance market. Insurance providers have responded to the commercial environment by offering various insurance types.
For instance, established construction companies can choose policies like professional liability, pollution liability, subcontractor default, etc. However, during your initial days of business operations, these are the must-have insurance coverages:
1. Commercial Property Casualty
Commercial property casualty insurance protects your firm from paying for damage due to natural disasters. It covers fire and theft of property as well. Most service-oriented and manufacturing businesses have casualty insurance policies.
As a construction business, this insurance policy can save you from losing billions of dollars on damaged or stolen equipment. You can ask your insurance provider about the coverage to learn more about commercial property casualty.
2. Builders’ Risk Insurance
You can refer to this policy as a ‘course of construction’ insurance. It is crucial because it protects under-construction projects. Technically, builders’ risk insurance will cover the financial costs of any mishaps that happen at an on-site location.
Your company can choose this while remodeling or building a new project. Therefore, you can mitigate risks and cover all involved parties. According to Hartford, it also covers soft costs like injuries and property damage due to delays.
3. General Liability Insurance
General liability insurance is the most sought-after policy in the commercial industry. It protects your construction company from claims made by third parties. For example, it covers costs incurred due to unintentional bodily injuries or property damage.
This liability insurance safeguards your business’s operations and services from defamation. With it, your business can operate safely and deal with unavoidable accidents efficiently. Technically, general liability insurance preserves your assets and covers damages up to policy limits.
Benefits Of Getting Insurance Coverage For Your Construction Business
A new construction company can only function with proper insurance solutions. It safeguards your brand’s finances and reinforces your ability to handle project-related issues. The construction insurance coverage provides the following benefits:
- Protects your firm from a loss of income due to property damage
- Safeguards your finances by providing medical assistance for on-site injuries
- Ensures a financial safety net for your assets and employees
- Covers the cost of damage and pays for the lawsuits
In short, construction insurance safeguards your company’s future and reputation. It proves to your employees and clients that you care about their safety. However, you will get these claims if the incidents are accidental.
The Bottom Line
In April 2023, two construction workers died at John F. Kennedy International Airport after being trapped under rubble. Approximately sixty firefighters tried to save them but to no avail. Of course, the victim’s families blamed the construction company and contractors for this negligence.
According to the Engineering New Record, workplace fatalities in construction declined at a 1.8% rate between 2020 and 2021. However, in 2022, there was a 9% increase. It proves the volatility of the industry.
Therefore, you must invest in good insurance coverage based on your construction requirements to succeed. It will safeguard project-specific assets and complex risks. Additionally, construction insurance offers financial stability and legal protection.
Remember to invest in employee safety and review the coverage periodically. Moreover, you must collaborate with a legal counsel or insurance agent to assess your construction company’s risks.