If you own or operate any business, the right insurance is a must. At the very least, you’ll need liability insurance in case someone is injured either on your property or as a result of your products or actions. When you’re a contractor, there are potential liabilities all around you, but with the proper construction insurance, you can get the peace of mind you deserve. To ensure you get specific coverage, below are four types of insurance all construction companies should consider.
1. General Liability Insurance
This type of construction insurance is usually required by law, but it’s a good policy to have regardless. It covers events such as injuries and even death that occur at your job site, as well as claims related to damages and even products when things don’t go as planned. Most of these things happen because of human error, which isn’t that uncommon. Still, it can wreak havoc on your entire project if you don’t have the insurance to cover your losses.
General liability insurance also covers things that you might not realize are related to the construction industry but which definitely apply in many cases. For instance, if one of your competitors decides to sue you because they believe you are copyrighting one of their project designs, you can use your general liability insurance to help you fight it. Numerous other scenarios are covered as well, and your agent can explain all of them.
2. Commercial Vehicle Insurance
If you are a professional contractor, you’ll be in your vehicle a lot, and standard auto insurance doesn’t cover things such as accidents that occur on your way to a job site. Depending on the coverage type, these policies could cover expenses such as medical bills, damages to the vehicle itself, and damages to property, among other things. Keep in mind that if you use your vehicle for work-related purposes, only commercial auto insurance will cover you.
If you own a fleet of vehicles because you’re a bigger company, this type of insurance is even more important. Commercial vehicle insurance covers you, the other employees at the company, and all of your vehicles. It is similar to regular auto insurance in some ways, but it tends to offer a little more coverage since commercial vehicles are driven so much more.
3. Professional Liability Insurance
Also known as errors and omissions (E&O) insurance, this coverage protects you if you provide advice or assistance to customers. It results in negative consequences, including financial loss. This type of insurance exists to protect your customers if you give poor advice, misrepresent a product or service, or you are negligent in your duties, and the client suffers because of it. While this isn’t always a problem in the construction industry, that doesn’t mean it can’t happen.
Insurance, in general, is there to protect yourself from the unexpected, which is why professional liability insurance is highly recommended for most industries. You will be advising customers and guiding them, and this insurance covers you in case you make a mistake, causing something to go wrong.
4. Workers’ Compensation Insurance
Most businesses are required to take out workers’ compensation insurance, and this is especially important in potentially dangerous careers such as construction. If an employee gets hurt on the job, workers’ comp can pay for medical and hospital bills so that no one has to pay for that out of pocket. It also covers lost salary, which is crucial when you have a deadline for your project – and don’t they all? If anyone on the team has to be out of work because of an on-the-job injury, this type of insurance will compensate you.
Workers’ comp does more than compensate you financially, however. It also helps keep the project running smoothly so that even if you do hit a snag, you can keep going, and the entire project doesn’t have to stop. If a project misses a deadline, that can mean losing a lot of money. Still, with workers’ compensation coverage, you don’t have to worry about this because you’ll get the financial compensation you need to keep the project going.
Construction insurance is crucial because many things can go wrong when you’re building or renovating a home, office, or other structure. Workers can get hurt, customers can become dissatisfied, plus a hundred different scenarios that are distinct possibilities regardless of the type of project. Whether the job is residential or commercial, you need to be prepared beforehand with the proper types of insurance so that if and when something goes wrong, the odds of it affecting the project permanently or seriously are greatly reduced.
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