Like a good neighbor many clients embark on their dream project without the proper protections.
Insurance is essential during any construction project, as is knowing the types of insurance needed for construction. First and foremost, it protects against a variety of risks, including accidents, property damage, and liability claims, which are inherent in the construction process. Additionally, many jurisdictions mandate specific types of insurance to ensure compliance and avoid penalties. Financial security is another critical factor; insurance safeguards against significant losses, helping to maintain the project budget. Lastly, having adequate coverage provides peace of mind, allowing teams to focus on their work without the constant worry of financial repercussions from unforeseen events.
Below are three coverages essential for most projects.
1. Builder’s Risk | A specialized type of property insurance designed to protect buildings under construction or renovation. It covers physical damage to the structure, materials, and equipment on the site due to risks such as fire, vandalism, theft, and certain weather events. It is effective during the construction phase until the project is completed or occupied.
2. Worker’s Comp | A form of insurance designed to provide financial support to employees who suffer job-related injuries or illnesses. It typically covers medical expenses, rehabilitation costs, and a portion of lost wages during recovery.
3. General Liability | A type of coverage designed to protect businesses from financial loss due to claims of bodily injury, property damage, personal injury, or advertising injury. This insurance typically covers legal fees, medical expenses, and settlements or judgments that may arise from incidents such as slips and falls on business premises, or damage to third- party property.
PRO TIP: Request to see a contractor’s certificate of insurance to ensure all coverages are up to date. Request the same of any subcontractors involved with your project.
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