What is Construction Insurance? What it Covers

Construction involves workers, transport vehicles, heavy equipment, and other necessary materials like cement bags, hollow blocks, steel rods etc. Construction is a risky work and serious injury or death of workers or damage to property is a common issue. So if you are involved in construction industry, it is very important to carry construction insurance. Construction insurance is an important consideration for construction professionals including builders, owners, contractors etc. It will serve as the greatest protection against any liability that may arise out of construction.

The unpredictable nature of the construction industry can make you pay for the tons of damages during the course of the construction. Construction insurance helps in covering a multitude of possible issues that arise during construction. The cost of the insurance premium would be many times lesser than the cost of these issues. This is why many construction companies consider construction insurance as an essential part of their construction budget.

Four main areas it covers
Construction insurance has many types of policies covering a wide range of losses arising during the construction. Construction insurance provides coverage to construction professionals from claims resulting due to various types of risks in the form of accidents, thefts, damages, and injuries. Some of the common construction insurance packages are Public Liability Insurance, Employers Liability Insurance, Contractors All Risks and Personal Accident Insurance.

Public liability insurance
Public liability insurance covers your business when you or your employees cause bodily injury or death to an outsider or damage a third party's property during the process of construction. A third party could claim that they have suffered a loss because of your negligence and sue you or your company for compensation and damages. Public liability insurance claims are sometimes said to run into hundreds of thousands of Euros. Public liability insurance policy helps you by picking up the cost of the claim.

Consider an example where public liability insurance provides you a cover. When one of your employees working at the construction site, drops a piece of equipment which falls to the street, injuring a passing pedestrian or damaging a person's property. He can sue you for your employee's negligence and claim against your firm.

Employers liability insurance
Employers liability insurance covers you against claims from your employees, if any of them suffers physical injury or death during the construction process. Public liability insurance covers your business against claims from third parties, where as employers liability insurance covers you from your employees' claims.

For example: When an employee working at the top floor at the construction site falls and suffers a serious injury or dies, he or his family members can claim against your firm. The employers liability insurance can help you by paying the employee's claims.

Contractors all risks
Contractors all risks insurance is designed specially for builders, owners and contractors. This policy provides cover for the property being worked on such as a new house which is being constructed. This policy covers loss or damage to contract works, materials and even equipments. For example if you are building a new house, you will be covered if any of your work in progress is damaged. Contractors all risks insurance can include cover for contract works, own plant, hired-in plant and employee's tools used for construction.

Personal accident
Personal accident insurance, sometimes called as accident insurance, provides an income if you are unable to work as the result of an accident at the construction site. Although personal accident insurance is no substitute for your full time earnings, it will at least reduce your financial worries during your recovery. Personal accident insurance is very useful for sole traders, business partners and company directors as it is extremely difficult for them to sue their own company for any accident.

For example, you are a self employed carpenter. You cut your hand and are unable to work for several months. As you have personal accident cover, you will receive some money to meet your financial needs until you return to work.

As accidents and damages are common during the construction work in most construction sites, construction insurance is definitely an important asset. Your construction project will be a lot safer and secure through a right construction insurance policy. However, the selection of right insurance company is also very important. Make sure that the insurance company you choose is a reputed one and experienced in construction insurance policies before making any decision.

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Workers Compensation Insurance - Construction Contractors

Worker's Compensation Insurance for construction-related framing contractors has always been expensive. Danny Harter, owner of DH Framing already knew that much because he faithfully carried this insurance in order to work in legal compliance with State insurance requirements. But what Danny wasn't expecting - to be suddenly cancelled by his Worker's Compensation Insurance carrier - happened in November, 2004 - all because "out of the blue," his insurance carrier simply decided that his company was "too small" for their interest. Danny had two employees, including himself, and a weekly payroll between $1,500 and $2,000.00.

Danny was notified of his cancelled workers comp policy when the client he was busily working for one morning, came up to him and said, "You can't work on this job - I've got a notice here that you don't have valid Worker's Comp Certificates with your insurance carrier anymore." How embarrassing!

Danny obviously lost time on the job, and income. But he did what he needed to do, and immediately started contacting insurance carriers, trying to find someone who would not consider him "too small," or otherwise, undesirable. After all, he was and still is a successful, hard-working small businessman. Shouldn't someone be interested in writing his business?

To no avail, Danny could not find an insurance carrier that would underwrite his business. Fortunately, he contacted an insurance agent who just happened to know about the Worker's Comp Co-Op. "Call these guys," the insurance agent said. And Danny did. I picked up the phone and talked to Danny about his business, and what happened to him.

Within one week, Danny and his employee were not only back on the job with the client who had to stop his work - he also had payroll services and worker's comp insurance coverage without those big deposits you have to put down with traditional insurance agents. So Danny saved not only saved his business. He saved additional, unnecessary hours - weeks - of downtime on the job, and those huge upfront fees.

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