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What is Construction Insurance?
What is construction insurance? types of insurance in construction industry
It’s always super important. It’s always best practice to be secure and to have insurance. So how do you do it? What types of insurance are there? And what is the best practice for controlling insurance? We’re going to talk all about that right now in this video.
Real Experiences with Insurance in Construction
All right, Types of insurance in construction industry so I’m going to tell you just a little bit of a story, which I hope you connect with, because it’s really fun. All throughout my career. I’ve been as a superintendent in different phases of my career, setting up cranes and right we have the normal stuff, right?
We need to make sure that we check their certification and they have insurance and that we have the, the lift director, we have riggers, we have inspected rigging, we have the substrate or the soils, check underneath the cranes so that they have a really good setup. And we don’t collapse the crane because it didn’t have a proper footing, on and on and on and on…
Lessons Learned from Insurance Mistakes
Types of insurance in Construction industry So when I was out there taking youth out to do activities, if one of them broke their neck, and I didn’t fill out something right on the form. And their insurance company was like, hey, homies, like, that’s up to you, that affects the rest of my life. Like those are just two things that shocked me when it comes to the world of insurance.
Types of Construction Insurance
So let’s cover these in this video right now, what are the different types of insurance and then we’ll give you some best practices.
1. Builders Risk Insurance Types of insurance in Construction industry
Builders risk insurance, also known as all risk insurance provides coverage for property damage and loss during a construction project. It typically covers risks such as fire, theft, vandalism, weather, and accidents. Builder’s risk insurance protects the project owner, general contractor, subcontractors, and lenders from financial risks resulting from damage to the project site, materials, equipment, and structures under construction.
2. Workers Compensation Insurance
Types of insurance in Construction industry Workers compensation insurance provides benefits to injured employees or people who become ill on the job. It covers medical expenses, lost wages, and disability benefits for workers injured during construction activities. Workers compensation insurance protects employers from lawsuits and financial liabilities related to workplace illnesses and injuries.
3. General Liability Insurance
Types of insurance in Construction industry General Liability Insurance covers things like bodily injury, property damage, and personal injury claims arising from construction activities. It protects contractors, subcontractors, and other parties from costs that result from lawsuits, medical expenses, legal fees, and other liabilities resulting from accidents, negligence, and third-party claims.
4. Professional Liability Insurance
Professional liability insurance, also known as errors and omissions, provides coverage for claims for professional negligence, errors, or omissions made by architects, engineers, consultants, or other professionals involved in the design and planning of a construction project. It protects from financial losses due to design errors, faulty specifications, or other professional mistakes that cause delays, defects, or disputes.
5. Contractors Equipment Insurance
Types of insurance in Construction industry This type of insurance covers anything from damage, loss, or theft of construction equipment, tools, machinery, or vehicles used on the construction site. It basically provides contractors coverage resulting from equipment breakdowns, accidents, or theft.
6. Subcontractor Default Insurance (SDI)
This type of insurance provides coverage if a subcontractor defaults, doesn’t perform, or becomes insolvent. It protects owners, contractors, and lenders against delays, disruptions, and additional costs caused by a subcontractor’s failure to perform their duties and meet their obligations.
Best Practices for Managing Insurance
1. Understand Insurance Needs
Understand insurance needs, what are you going to need, what kinds of insurance by type are you going to need for that project according to the risk, and in the local region where you’re building.
2. Work with Experienced Insurers
Make sure that you’re working with people that are used to this kind of insurance and that they are specifically knowledgeable about construction and can make sure that you have the right kind of coverage for what you need.
3. Review Contractual Requirements
Types of insurance in Construction industry Review contractual requirements and obviously, you’re going to meet them. So whatever is specified in the contract, you will have to provide.
4. Select Adequate Coverage
Select adequate coverage, again, according to your project, and you may want to be insured for other things like environmental liability, or cyber liability. There are all kinds of policies that you can get, make sure you’re covered, and that you select the right policy.
5. Regularly Assess Your Coverage Needs
Make sure that you’re covered, you’re up to date, that you’re renewing any cost, that all of your policies are current, and that you update your policies according to project changes and new risks that you may find.
6. Promptly Report Claims
Types of insurance in Construction industry Always make sure that you are promptly reporting claims, like right away, and getting as much documentation as possible.
7. Maintain Good Communication
Maintain good communication with the insurance companies. Always have an open line and a point of contact.
8. Constantly Evaluate and Adjust
Types of insurance in Construction industry Don’t just do what you’ve always done, stay current with market trends and the needs of your project.
9. Stay Informed
Stay informed — you might want to attend relevant communities of practice, seminars, or trainings, or even talk to experts that you might know to stay connected and relevant with the current information and the industry trends.