With the constant risk of incidental damage, theft, or fires constantly looming, having the right construction insurance plan in place is essential. Unpredictable circumstances are often threatening the progress of jobs, which makes insurance crucial for recovering lost costs and covering your bases. Selecting the right type of coverage, and with a reputable provider is a difficult yet important decision that all construction companies must make. This article provides businesses with important tips and considerations that must be made prior to purchasing insurance, as well as strategies for businesses who are thinking of altering their current insurance plan.
Before visiting with any insurance company, it is essential to assess your needs and risks first. This enables you to clearly understand the kind of problems to look out for, and will help allow you find the right type of coverage for your construction company. Having a good idea of your needs prior to making a call or visit to an insurance company can also help expedite the process. For businesses that are constantly growing and changing, make sure to continually assess your needs and risks as you go along. This may have an impact on your insurance coverage.
Find an Insurance Provider That is Trusted
This may sound like a cliché, but finding a trusted insurance partner is essential, and should be the main determinant when deciding on what provider to partner with. Although the tendency may be to go with the cheapest option, a greater consideration must be whether a provider’s policies are a good fit for your particular business. Review all of your options, make reference calls, research online and talk to as many people before deciding regarding a construction insurance provider. Refer to colleagues and other professionals to find who is popular in the industry, and who to avoid. Doing your due diligence may take plenty of time, but is ultimately the best long term solution.
Begin With Basic Coverage
The most common type of construction insurance out there is Commercial General Liability, more commonly known as a CGL policy. These types of insurance packages often covers injuries and property damage, which are incredibly common among construction companies. An example of what a CGL policy provides would be coverage for damages resulting from faulty work, but the following repairs that are necessary will not be covered.
Once you have your basic coverage, the next step is looking into the specific types of insurance your particular construction company needs. Professional liability insurance is becoming a necessary tool in the industry, especially for design-build businesses who assume multiple roles within one project. Another option is risk policy, which covers the building itself, as well as materials used on a jobsite or in transit. Risk policy will come in handy if events like fires, vandalism and wind damage.
Identify Where your Insurance Policy is Lacking and Act On It
Not all construction insurance plans are perfect, and as you continue working on projects, you will begin to notice a few holes. If you start to see a pattern arising, the best thing to do is add additional coverage. Depending on a variety of factors like weather, pollution or type of trade, you may want to tack on a new policy. The new types of coverage you add may differ depending on the specific construction trade your business does, ranging from paving, demolition, HVAC, carpentry, mechanical among many mothers. For higher risk trades, like roofing or framing, your business may want to consider contractor or project-type coverage as most CGL plans do not protect against these risks.
The key to having a successful and reliable insurance plan is to start with a solid foundation, with a reputable provider, followed by identifying what areas of your business can use additional protection. Remember however, that although many insurance plans are time-bound or project-based, reassessing your needs and risks must be an on-going process. Taking the time to do this can help prevent irreversible damage or a large financial hit that could have otherwise been prevented.