How Does Construction Company Insurance Work? - Farmer Brown Insurance Agency - Contractor Talk

How Does Construction Company Insurance Work?

 
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Old 07-23-2020, 06:53 AM   #1
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How Does Construction Company Insurance Work?


How Does Construction Company Insurance Work?

Insurance is one of the cheapest ways to protect your business. In essence you pay someone else to bear the costs of unforeseen events. With a relatively small investment, you can protect your projects and your company. Without insurance when something goes wrong, it can threaten your sustainability.

How do you know what insurance you need?

Types of insurance for the construction industry

There are many different forms of insurance available. This can be confusing to many contractors. A way of simplifying it is to consider most risks fall into the following groups: Property Coverage, Liability, Workers Compensation, and Commercial Auto Insurance.
Property Coverage - Builder’s Risk
A Builder’s Risk Policy protects the building, tools, equipment and supplies in the course of construction. Each policy is unique because so is every project. Most policies include losses through fire, theft, bad weather and vandalism. This can be extended to include other things as needed by the individual project.
Liability - Contractors Liability
This insurance assists you when you are sued for causing bodily injury and/or property damage to a third party. It helps with the costs of your legal team as well as witness fees or the costs of evidence. A lawsuit can spell disaster for your business. This insurance is very important to protect you from these very high costs. There are some exclusions from Contractors Liability such as negligence in making a professional error. For this Professional Liability is required.
Workers Compensation
If an employee is injured at work, they are covered by Workers Compensation. It assists with the loss of income your employee could suffer after an accident. It also pays medical care costs. Liability coverage only covers injuries to third parties and not to employees. This is mandatory insurance for all employers. If you don’t have it, not only will you be liable for the costs associated with the injury; you will also be fined.
Commercial Auto Insurance
This insurance protects the vehicles you and your employees use in the course of work. If one of your vehicles is involved in an accident it will assist with repair costs, medical payments and liability costs (if your employee is the cause). Most policies also include coverage for theft and vandalism.

What Insurance Does Your Company Need?

Each company is unique and this means that the insurance you need is too. There are many factors to consider for your company, such us:
  1. What type of work do you do?
  2. What risks do you typically face?
  3. What projects do you work on?
  4. What assets such as tools, equipment and vehicles, do you have?
  5. How many employees do you have?
  6. Is your business growing, or are you scaling down?
  7. What insurance is required by law in the location where you work?
The answers to these questions will determine the coverage that you need. As in many things, with insurance you get what you pay for. The aim should be to optimize your protection at a price you can afford.

Need More Information?

To learn more about how the right insurance can assist your company, call Farmer Brown Insurance on (888) 973-0016.
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