As a construction company or contracting firm owner, you must assemble several necessary components before embarking on a construction project. Along with agreeing on a service contract with your customer and ironing out delivery arrangements, you'll need to ensure that you're adequately insured against any risks that could affect the construction and compromise project completion.
Numerous types of insurance are available to protect property owners, developers, and contractors throughout a construction project. This blog aims to help you understand the types of construction insurance coverages available for your firm.
1. Contractor License Bonds or Surety Bonds
Construction projects are subject to the provisions of a wide range of laws, so you must ensure that you comply with any state regulations. To ensure compliance, you must be bonded, and one of the most important types of construction license bonds available is a contractor license bond or surety bond.
A contractor license bond protects your customer if you cannot finish a project on time and follow your obligations. A surety bond protects your customer if you fail to meet the terms of your contract.
2. Commercial Property Insurance
Your construction company will require commercial property insurance like any other type of business. This coverage is critical because it protects your assets and investment, such as tools and vehicles, against risks or liabilities related to construction work.
3. Professional Liability Insurance
Professional liability insurance is particularly essential if you're an architect or engineer. It covers the cost of an injured party's legal fees and protects you against professional negligence allegations.
4. Property Insurance
Property insurance policies cover the construction site's physical assets such as the building under construction, the area itself and any other buildings, structures, or improvements that are part of the property.
5. General Liability Insurance
A general liability insurance policy is essential for any contractor and protects the business from third-party injuries and property damage. This policy covers the costs of defending you against an insurance claim as well as the claim itself.
6. Contractor's All Risk Insurance
Construction projects are often delayed or affected due to damage caused by inclement weather. And suppose you're working on a construction project. In that case, you'll need to arrange for the contractor's all risk insurance to protect your property against damages caused by natural disasters like fires and floods.
7. Contractor's Equipment Insurance
Equipment breakdown is another common occurrence in the construction industry. To protect your tools and equipment and ensure that they are functioning correctly to complete your project, you need to avail of contractor's equipment insurance.
Conclusion
You're ready to buy construction insurance now that you know more about what it does and what types of insurance coverage you might need for your construction project.
While all the types mentioned above of insurance packages are essential for your business, you need to evaluate them carefully and determine which ones are best for your project, based on your construction project's goals, size, and complexity.
Contact an insurance broker that specialises in the construction industry for more information on the subject.
New Wave Insurance partners with a variety of insurance companies to provide you with the best possible coverage. We are the Gold Coast's leading insurance broker, assisting businesses in selecting the most appropriate business insurance service. Contact us today to arrange a complimentary 15-minute consultation!