Construction is an inherently risky industry, which makes strong financial protection necessary. With accidents, property damage, and legal disputes being common, the right insurance coverage is essential. Without it, a single claim could result in serious financial setbacks or, in the worst-case scenario, force a company out of business.
The type of insurance a construction company needs depends on company size, project scope, and legal or contractual obligations. Below, we’ll go over the must-have policies that every construction business should carry, as well as additional coverages that may be necessary in specific situations.
Always:
Some insurance policies are fundamental for protecting workers, clients, and the business itself. These are considered industry standards.
General Liability Insurance
General liability insurance provides protection against claims of bodily injury or property damage resulting from a company’s operations. If a client or bystander gets hurt on a job site, or if construction work accidentally damages a nearby property, this coverage helps pay for medical bills, legal fees, and settlements. In fact, most construction contracts require this insurance before work can even begin.
Workers’ Compensation Insurance
Given the physically demanding and hazardous nature of construction work, workers’ compensation insurance is legally required in most states. This policy covers medical expenses and lost wages for employees injured on the job. Without it, companies could face expensive lawsuits and penalties.
Commercial Trucking Insurance
Construction businesses frequently use trucks, vans, and other vehicles to transport materials, tools, and workers. Commercial trucking insurance covers accidents, vehicle damage, and liability claims related to business-related driving. Personal auto insurance won’t cover vehicles used for work, making this policy essential.
Builders Risk Insurance
This insurance protects construction projects in progress, covering damage to buildings under construction as well as materials, tools, and equipment on-site. Fires, vandalism, severe weather, and theft are all potential threats to a project. Builders risk insurance ensures that these setbacks don’t result in major financial losses.
Professional Liability Insurance
Also known as errors and omissions (E&O) insurance, this policy covers claims related to design flaws, miscalculations, or project errors that cause financial harm to a client. It’s particularly important for contractors involved in design-build projects or project management roles.
Sometimes:
While the coverages above are standard for most construction businesses, additional policies may be necessary depending on the type of work, project size, or client requirements.
Pollution Liability Insurance
If a project involves hazardous materials or poses an environmental risk, pollution liability insurance can be a smart investment. It covers cleanup costs, legal fees, and third-party claims resulting from pollution-related incidents caused by construction work.
Umbrella Insurance
This policy provides extra coverage beyond the limits of general liability, commercial auto, and workers’ compensation insurance. It’s particularly useful for companies handling large projects where a single claim could exceed standard policy limits.
Contractor’s Equipment Insurance
Construction companies that rely on expensive equipment—such as cranes, bulldozers, or excavators—may benefit from contractor’s equipment insurance. This coverage helps protect against theft, damage, or breakdowns of owned or rented equipment, reducing financial risks associated with repairs or replacements.
Inland Marine Insurance
Despite the name, inland marine insurance has nothing to do with the ocean. Instead, it covers tools, machinery, and materials while they are being transported to a job site. Since construction companies frequently move valuable equipment between locations, this coverage helps prevent significant financial losses.
Cyber Liability Insurance
Today’s construction companies rely on digital systems for project management, employee records, and financial transactions. A cyberattack or data breach can result in stolen information, financial losses, and legal issues. Cyber liability insurance helps cover the costs of handling a cyber incident.
Employment Practices Liability Insurance (EPLI)
EPLI protects construction businesses from claims related to wrongful termination, discrimination, harassment, or other workplace disputes. As companies grow and expand their workforce, this coverage becomes increasingly important.
Commercial Trucking Insurance Near Harrisburg, PA
Many insurance providers may try to convince you that you need more coverage than necessary. At The Kind Insurance, we take a different approach. As an independent agency, we are not restricted to any one insurer. Our agents take the time to understand your unique needs and budget, then match you with the best policy for your situation.
Reach out today for a free insurance quote and make your commercial trucking insurance affordable without sacrificing the quality of your coverage.