What is Construction Insurance? Who Needs Construction Insurance?

Construction insurance can be defined as insurance protection incurred for every construction project that serves the objective to provide financial compensation for any damage, mistakes, errors, or unfortunate issues during the construction process.

Construction insurance provides coverage for materials, risks, natural disasters, employees, and one's own business. Now, insurance companies are trying to provide insurance for every unique situation in the construction industry.

What is Construction Insurance? Quick Guide

What is Need for Construction Insurance?

The unexpected expense and distress that is brought during the construction process due to certain unforeseen events are covered by having construction insurance. These unforeseen events include:

1. Legal Action from Clients or third part individuals due to difference in opinions or any other cause.
2. Injuries caused to workers or third-party individuals.
3. Accidental damages to third party properties.
4. Loss or theft or damage to expensive tools or equipment.
5. Damages caused to business property due to natural disasters.

Who will Need Construction Insurance?

Construction companies are of several types from small to large establishments. In general, construction companies that comes under the below categories requires construction insurance:

1. Owner or Builders
2. Program Managers
3. General Contractors
4. Small Renovation Contractors
5. Package Builders
6. Construction Program Managers
7. Real Estate Developers

What are the Types of Construction Insurance?

The classification of construction insurance can be performed based on the business aspect and certain conditions:

1. Protection for injuries and damages due to day-to-day operation      
2. Protection for Unfinished project, equipment and tools.
3. Protection for digital and physical assets of the business

1. Protection for injuries and damages due to day-to-day operation  

This category includes:

1. General Liability Insurance Read More>>
2. Worker's Compensation Insurance Read More>>
3. Professional Liability Insurance Read More>>
4. Pollution Liability Insurance

2.  Protection for Unfinished projects, equipment, and tools.

1. Builder's Risk Insurance Read More>>
2. Inland Marine Insurance
3. Installation and Tool Floater Insurance

3. Protection for digital and physical assets of the business

1. Commercial Property Insurance
2. Commercial Auto Insurance or Truck Insurance
3. Cyber Insurance

Reference: KASE News

Also Read: What is Pre-construction? Pre-Construction Services and Features