What construction liability insurance coverages should contractors look for?
Construction liability insurance coverages mainly guard against situations where a contractor or business could be held responsible for harm. An accident that causes injury or property damage, or another incident that the contractor causes, may be covered under construction liability insurance. Some of the liability protections that policies often have are:
- General Liability Coverage: May apply if there are common accidents at facilities and job sites, which cause injury or property damage to another party.
- Professional Liability Coverage: May apply if there are mistakes in work completed, or any advice given to customers..
- Employee Practices Liability Coverage: May apply if there are discrimination or harassment lawsuits filed by employees.
- Commercial Umbrella Coverage: May apply if additional protection is needed, beyond the limits of what another liability coverage affords.
Most contractors also need commercial auto insurance, in order to protect against potential car accidents involving their vans or trucks. Several types of commercial auto are available. An insurance agent who knows construction policies well can help contractors decide which type is right for their vehicles.
What property coverages should contractors look for?
Exactly what property coverages contractors need depends on what they own. In many situations, contractors need protections such as the following:
- Building Coverage: Might protect company-owned storage facilities, offices and other buildings.
- Builders Risk Coverage: Might protect materials, tools and equipment while they’re kept at job sites.
- Inland Marine Coverage: Might protect materials, tools and equipment while they’re being taken to and from job sites.
- Mobile Equipment Coverage: Might protect mobile, non-vehicle equipment such as backhoes, forklifts and excavators.
- Equipment Breakdown Coverage: Might protect the most necessary equipment against breakdowns, often paying for emergency repairs.
- Extra Expense Coverage: Might protect against additional costs, like renting another facility, if certain disasters render buildings unusable.
Should construction businesses purchase workers compensation insurance?
Massachusetts law generally requires workers compensation, which usually protects against workplace injuries, if a business hires employees. The requirement normally applies to employees, and often not to subcontractors.
Since most contractors in the construction industry have at least a few employees, they probably should plan on getting this coverage. It could be needed for workers, foremen and even office employees. Subcontractors can likely be excluded from coverage, however.
While typically not required, subcontractors are sometimes voluntarily listed on a construction business’s workers compensation policy. Businesses that wish to extend coverage to subcontractors and work with a knowledgeable insurance agent to do so.
Do construction businesses need to purchase construction bonds or contract bonds?
Contract bonds and construction bonds can be used to provide a customer with additional assurance. These bonds often compensate the customer if their hired contractor fails to complete work as agreed upon.
Whether construction businesses need these bonds often depends on what sort of work they do. Businesses that work on large projects may be required to get bid bonds, payment bonds, performance bonds, or occasionally other bonds. Some businesses that hire contractors for major projects will only consider contractors who are willing to get such bonds.
Bonds are much less often needed for smaller projects, like remodeling or building a single house.
Where can contractors find construction insurance?
For help with construction insurance in Massachusetts, contact the independent insurance agents at Norwood Insurance Agency. We’ll make sure you get well protected.