If you own a construction company, you need adequate insurance to protect your investment. You may not realize it, but there are two types of necessary coverage, and they aren’t interchangeable. Let’s take a quick look at each.
Builders Risk Insurance
A builder’s risk policy covers the contractor’s property, materials, and equipment where the construction is taking place. This policy protects the project until it is finished and the owner approves of the work. The policy also covers unexpected perils, such as weather events, vandalism, and theft. Examples of damage include:
- Lightning strikes and hail
- Explosions and fires
- Theft and vandalism from external sources
- Vehicles that crash into the building
If the damage was caused by flooding, it won’t be covered. In addition, coverage is excluded for any weather-related damage that resulted from property left unprotected. Most builder’s risk policies only cover the damage to property or materials of the insured contractor.
Contractors’ General Liability Insurance
This general liability insurance covers bodily injuries, accidents, and damage at the construction property. In addition, if you or your workers are accused of causing injuries or property damage at the site, general liability insurance will protect your business. It will also cover litigation from claims of libel, slander, or false advertising.
Both policies are critical to protecting your construction company.