Construction Business Insurance

Insurance requirements can vary by location and contract. Most construction projects need:

• General liability insurance (covers accidents or damage)
• Workers' compensation (for employee injuries)
• Builder’s risk insurance (for damage to the project itself)
• Pollution liability (for sudden, accidental releases or exacerbation of existing conditions)
• Professional liability (for design, engineering and performance)
• Surety bonds

Even if a coverage is not contractually required, consider what you need for business resilience.

Builder’s risk insurance protects the construction site and materials from risks like fire, theft, or weather damage during the project. It’s temporary and typically ends on the issue date of your certificate of occupancy.

Subcontractors usually need their own insurance, like general liability and workers' compensation. However, you want to do research on the specific construction project first. What coverages do the construction contracts require? Is there an OCIP (owner-controlled insurance program) or CCIP (contractor-controlled insurance program) in place? Brown & Brown can help you identify the requirements and your options for securing coverage.

Risks depend on factors like project size, location, and type of work. A risk assessment, often done with an insurance broker who specializes in construction, identifies potential hazards, so you can plan your insurance program more precisely.

Being licensed means you’re legally allowed to work in your field. Bonded means a third party guarantees you’ll complete your work or pay damages if you don’t. Insured means you have coverage for accidents, injuries, or damages.

Most states require workers’ compensation by law. This insurance covers medical bills and lost wages if an employee gets injured on the job, protecting both the worker and the employer.

Work with an attorney and an insurance broker who specialize in construction to examine your contracts. The attorney reviews contracts through a legal lens, while the broker identifies insurance and risk management concerns. You need both perspectives. You want clauses that clearly state who is responsible for specific risks, like property damage or injuries, to avoid disputes later.

Common exclusions include faulty workmanship, intentional damage, and wear and tear. Always read the policy carefully to understand what’s not covered.

Look for a broker with experience in construction insurance and the ability to tailor policies to your specific business needs and projects.

Standard insurance usually does not cover delays or cancellations. You may need a specific policy, like delay-in-startup insurance, to cover financial losses from delays.