How To Know If Your Business Needs Construction Liability Insurance

All businesses are exposed to some risk, but construction companies face an especially high level of risk. To protect against the risks they face, contractors need construction liability insurance. If you run a construction company, here’s a look at specifically why your company should have construction liability insurance and what types of protection that insurance should include.

Contractors Are Exposed to Many Risks

As anyone in the construction industry knows, construction companies are exposed to many different risks. Workers themselves have a 3-in-4 chance of suffering a debilitating injury during a 45-year career (not to mention a 1-in-200 chance of having a fatal accident). On-the-job injuries are far from the only risk that contractors face, though. In addition to protecting employees, contractors must also:

  • prevent others from being injured on construction sites
  • secure equipment against theft and vandalism
  • safeguard against mistakes and errors in their work

Without adequate construction liability insurance, any of these risks could financially devastate your construction company. Stolen equipment could cost thousands or tens of thousands dollars to replace. A fatal accident involving a child who was climbing on a construction site might result in a six- or seven-figure sum.

(Contractors are often required to take reasonable measure that deters children from climbing on construction sites because sites are considered “attractive nuisances.” Attractive nuisances are things that kids may find interesting but are potentially dangerous.)

The sole reason that your company faces potentially insurmountable financial risks if it’s not insured should be enough of a reason to purchase construction liability insurance coverages.

How To Know If Your Business Needs Construction Liability Insurance  

Governments and Clients Require Insurance

If you need additional incentive to insure your construction company, there are two other good reasons to.

First, many governments require contractors to carry minimum levels of construction liability insurance. Your business may be subject to federal, state or local legal requirements, and operating without any minimum required coverage could result in a fine for or shutting down of your business.

Second, lots of clients will only hire contractors who carry a certain level of insurance protection. Clients do this in order to protect themselves — they’re more likely to be sued after an accident if the contractor they hired doesn’t have sufficient insurance. Thus, you may find your company’s potential work is greatly limited without an adequate insurance policy.

Contractors Need Multiple Liability Protections

Because the risks that contracting companies face are diverse, contractors usually need several liability protections. Your company likely should have:

  • construction general liability insurance, which helps protect against common accidents
  • business automobile insurance, which provides protection for auto accidents
  • umbrella liability insurance, which provides additional layers of protection
  • errors and omissions liability insurance, which helps protect against mistakes that occur when giving advice

In addition to these, it’s important to also have property coverages, such as builders’ risk insurance. Property coverages protect the equipment, materials and other items that a contracting business owns.

How To Know If Your Business Needs Construction Liability Insurance  

Get Multiple Construction Liability Insurance Quotes

When shopping for a construction liability insurance policy that contains all of these coverages, you’ll get the best protection at the lowest rate if you request multiple quotes from construction liability insurance companies. Once you have several quotes, you can compare them to see which one is the best policy.

Find a Policy for Your Construction Company

In short, your construction company needs contractor’s liability insurance. Without insurance, your company will be:

  • faced with many potential risks
  • potentially fined or shut down by a government agency
  • limited in the work it can pursue

To get quotes for construction liability insurance policies that meet all of your company’s needs, contact us at Marine Agency Insurance. We’ll get you quotes from construction liability insurance companies for policies that meet your company’s needs.

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