Construction is an inherently risky business. It involves heights, heavy machinery, power tools, and a variety of other hazards. Unfortunately, all of these perils expose your business to legal liability, should an accident occur.
Are you searching for ways to shield your small construction business from the everyday threats it faces?
First things first, you’ll need the right construction coverages. Not only do you want to protect the well-being of you and your employees, but you want to preserve the financial health of your small business. But what are the types of construction insurance worth considering? Below, we’ll show you.
Types of construction insurance
Although there are several types of insurance that are worth considering, we’ll focus on five specific coverages that would best protect your small business. They include:
- General liability insurance
- Workers’ compensation
- Commercial automotive insurance
- Surety bonds
- Commercial property insurance
General liability insurance
The world of construction is filled with inherent risks—accidents come with the territory. Because of this, many states require construction business owners to have general liability insurance before they accept a job. Typically, a general liability policy shields you from the following liabilities:
- Third-party injuries
- Third-party property damage
- Advertising errors
But what does general liability insurance cover?
Bodily injury – As a contractor, you regularly have clients come onto your jobsite. Should a client trip and fall during a progress check-in, you as the business owner, could be liable for their injuries.
3rd-party property damage – Construction often requires the use of heavy machinery. Should your team accidentally damage the adjoining property while using these machines, you could be responsible for fixing the damages.
Defense costs – If you’re working on a large construction project, there’s an inherent risk that a third party could get injured. Should an injury occur, this could result in a legal battle. Without general liability insurance, you would have to pay for a legal team out of your own pocket.
Advertising errors– Your business regularly runs ads in the paper, on the internet, and on the TV. Should your ad target a competitor and they’re offended by the message, you could be liable for false advertisement or libel.
A general liability policy will help protect from the financial fallout of all the above.
Workers’ compensation
However, a general liability policy will not protect your construction workers from injuries on the job—for that, there’s workers’ compensation. Unless your construction company is operating in Texas, you’ll be required by your state to have some form of workers’ compensation (should you have employees).
Workers’ compensation laws vary by state. Most states require a specific number of workers—three in some, five in others. And still others order that corporate executives be counted as employees. Because of this, you’ll have to conduct your own research to see what your state’s guidelines stipulate.
Regardless, if an employee gets injured on the job or during a work-related task, workers’ comp provides coverage for:
- Medical expenses
- Physical therapy
- Compensation for fatal injuries
- Legal defense
- Court costs
- Settlements or judgments
- Missed wages during recovery
Commercial auto insurance
Construction workers are regularly tasked with driving large vehicles like dump trucks, box trucks, and work vans. If your small business owns those vehicles, you’ll need a commercial auto insurance policy to protect your business and its employees from the inherent risk of a potential accident.
Most states require registered work vehicles to have a commercial auto policy with minimum levels of bodily injury and property damage liability coverage. As with workers’ compensation, you’ll have to do your due diligence to see what your state requires in terms of business insurance.
That said, commercial auto insurance provides coverage for:
- Accidents with uninsured motorists
- Physical damage and collision
- Medical payments
- Auto accident liability
Surety bonds
In many cases, it’s mandatory for a contractor to obtain a surety bond in order to work. This bond acts as a cash guarantee of their performance, honesty, and adherence to strictures (the contract-related as well as local, state, and federal legal requirements).
Surety bonds act similarly to insurance. If you fail to deliver the promised work, the provider of the surety will cover the losses to the employer. So, if you can’t complete the job or pay for materials, the surety bond will help cover those costs.
Commercial property insurance
Your equipment is valuable. Commercial property insurance protects your personal property on jobsites (or when it’s being transported between various locations).
A commercial property insurance policy ensures the future of your business, helping protect the following:
- The building(s)
- Your equipment
- Your inventory
- Others’ property
- Your landscaping
- Your signs and fences
Your physical assets are an invaluable part of your business. Without them, you may be unable to operate. A commercial property insurance plan helps you prevent an accident or unforeseen mishap from hindering your operations and causing business interruption.
Protect your small business
Few industries hold as much inherent risk as the construction business. Knowing this, it’s vital that you invest in several types of insurance to ensure that your small business is covered from all angles. Although there are many types of construction insurance worthy of consideration, it’s smart to start with:
- General liability insurance
- Workers’ compensation
- Commercial automotive insurance
- Surety bonds
- Commercial property insurance
Fortunately for you, getting your contractors general liability insurance is effortless with Thimble.
Thimble’s on-demand policies are changing the way we’re used to getting insurance. We’ve designed a smarter way of doing things—you only pay for insurance when you’re working. You can purchase a general liability policy that goes by the hour, day, or month. This means you only ever have to pay for it when you’re actually on the job, and that you can take out policies on a project-to-project basis.
Get an instant quote. Just enter a few brief details about your business, and we’ll generate a free quote. From there, you can purchase the policy and have a Certificate of Insurance (COI) in your email inbox instantly. In less than 60 seconds, you can go from exposed to liability to covered from it. It’s that simple.
Although there are various types of insurance you should consider (and might be legally required to purchase), we can help you solve one piece of the puzzle that will protect you from third-party claims of bodily injury, property damage, personal injury, and advertising injury.
You construct buildings. We construct safeguards to keep your business safe while you’re doing so.
