How can you ensure adequate insurance coverage for your construction project?

1 Types of insurance

When it comes to construction projects, there are various types of insurance you may need or want to have, depending on the nature, scope, and complexity of the work. General liability insurance covers any bodily injury or property damage caused by you or your subcontractors; builder's risk insurance covers physical loss or damage due to fire, theft, vandalism, or natural disasters; professional liability insurance covers errors or omissions made by you or your design team; workers' compensation insurance covers medical expenses or lost wages due to work-related injuries or illnesses; and umbrella insurance provides additional coverage beyond the limits of your other policies for large or catastrophic claims.

3 Contract requirements

When choosing and negotiating insurance for a construction project, it is important to consider the contract requirements that must be met. These terms and conditions are agreed upon with the client, owner, lender, or other parties involved in the project regarding the insurance coverage. Minimum limits, certificates of insurance, additional insureds, and waivers of subrogation are all factors to consider. Minimum limits are the minimum amounts of coverage that must be provided or obtained for each type of insurance; certificates of insurance are documents that prove the required coverage; additional insureds are parties added to policies to share benefits and protection; and waivers of subrogation are clauses that waive an insurer’s right to recover from another party. It is essential to ensure that all these requirements are met accurately, completely, and in a timely manner.

4 Cost of insurance

The cost of insurance for your construction project is an important factor to consider when choosing and negotiating coverage. This cost depends on the type, scope, and duration of the project, the level and quality of coverage, the risk profile and claims history of the insured, and market conditions. To get the best value for your money, you should compare and negotiate the cost of insurance among different insurers and brokers. Additionally, you can reduce the cost of insurance by increasing your deductibles, bundling policies, improving risk management, and reviewing and updating your policies regularly. Insurance is a key part of construction management since it can protect you from financial losses and legal liabilities that may arise during your project. With careful consideration of these factors, you can ensure that you have adequate insurance coverage for your construction project and complete it successfully and safely.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?