Construction InsuranceAssociation of Construction & Development
February 17, 2014 — 1,896 views
Construction projects are subject to many risks like accidents, thefts, vandalism and so on. This makes it very essential for every construction manager to get a proper insurance cover for the project. Most construction insurances offer coverage for certain natural disasters, construction materials, employee risks, and some even offer coverage to the business. This keeps the construction company at a safer side in the event of any loss or mishap. There are various kinds of insurance coverage available for construction projects. It becomes very essential for construction companies to select the one that provides them the maximum coverage based on their needs. Here is a look at some of the basic insurance coverage packages that construction managers can go for.
Builders Risk Insurance
Builders risk insurance offers coverage for the structure or to the building materials that are to be transported to the actual site or are to be installed. This insurance policy pays for the damages that fall within the coverage limit. However, the limit must accurately indicate the total value of the completed building or structure. This total value includes the value of labor costs as well as all the materials but does not include the value of the land. The budget of the construction of the building is one of the best sources for determining the limit of this insurance.
It can be written for 3 to 6 months, or even 12 months. If under any circumstances, the construction process does not get completed in the mentioned time, the policy can be extended, but this can be done just once.
Builders risk insurance covers damages related to the insured structure. These damages can range from fire, theft, explosions, vandalism and so on. Collapse of the structure is subject to limited exclusions. Standard exclusions include employee theft, earthquake, water damage, and war.
General Liability Insurance
General liability insurance provides protection to home builders, contractors, and re-modelers for issues like accidents, injuries, and property damages suffered while on the job. For this policy, you are required to hand out the proof of construction liability insurance prior to remodeling or repairing of the building. This kind of insurance becomes essential for residential buildings because there can be times when homeowners may feel the need of suing contractors for damages that can occur during the process of construction. On the other hand, workers too may feel the need to file litigation against the contractor or homeowner if they get injured while working on the site. A well drafted construction insurance policy provides protection to the builder from issues like lawsuits and from unexpected losses too.
However, construction liability also has its own set of limitations. You are required to set a limit on each occurrence and also limit the aggregated value. Fire damage to under construction property is also subject to limitations. Medical expenses of the injured workers who may not be liable to workers compensation also come under the limitation. However, in any case, it is a good idea to have an appropriate construction policy in place.