What is Construction Insurance?
Running a construction company requires a sizeable investment and presents substantial risk. Should a company sustain property loss or be named in a liability lawsuit, everything poured into a company could potentially be lost if the right protections aren’t in place. Construction insurance is designed to help Massachusetts construction companies get many of the protections that they need.
Construction insurance is a specialized form of commercial insurance that’s designed for businesses in the construction industry. Because these businesses face multiple and substantial risks, construction policies normally come as package policies that combine several individual coverages together for robust protection.
Who in Massachusetts Need a Construction Policy?
The vast majority of Massachusetts businesses that are involved in the construction industry can benefit from the protections that a construction policy offers. Just a few examples of companies that might want this insurance include:
- Residential construction companies
- Commercial construction companies
- General contractors
- Home remodelers
- Specialized contractors
- Heavy contractors
From a one-person plumbing or masonry business to a major general contractor or commercial construction company, this type of insurance can often be adapted to suit many different construction businesses’ particular needs.
What Coverages Do Construction Policies Make Available?
Many of the diverse coverages that construction policies make available can be categorized as either construction liability insurance coverages or construction property insurance coverages. Construction liability insurance coverages normally protect a company in situations where it may be sued, while property coverages usually offer protection for owned buildings and assets.
Some of the construction liability insurance coverages that construction policies frequently offer are:
- General Liability Coverage, which may insure against common accidents and some basic lawsuits
- Professional Liability Coverage, which may insure against errors that employees make in their work or when giving advice
- Commercial Umbrella Coverage, which may provide additional liability protection that serves as a secondary level of coverage
Some of the property coverages that construction policies might provide are:
- Commercial Property Coverage, which may insure owned facilities and equipment kept at those sites
- Inland Marine Coverage, which may insure equipment as it’s transported to and from worksites
- Builders Risk Coverage, which may cover equipment and supplies while they’re at a worksite
- Extra Expense Coverage, which may cover the cost of renting an alternative facility following a covered loss
Many construction companies also need commercial vehicle insurance because they have company-owned vans and/or trucks. Commercial vehicle insurance offers a combination of liability and property coverages for driving-related risks.
Do Construction Policies Come With Workers Compensation?
Workers compensation is a coverage that normally protects against work-related injuries. It’s legally required in many situations, and most construction businesses certainly have a vested interest in getting the coverage since injuries are somewhat common when working on construction sites.
Massachusetts state law generally requires businesses that have employees to carry workers compensation, and some businesses might even need the coverage for subcontractors. An agent who specializes in construction policies and related coverages can help businesses determine whether the specifics of their situation necessitates workers compensation coverage for subcontractors. In either case, many construction companies need this coverage for their W-2 employees.
Whether workers compensation is included within the coverages of a construction policy depends on the policy, however. Some policies provide the coverage, while others instead leave it to be purchased on its own. If workers compensation isn't part of a construction policy, it’s readily available via stand-alone policies that can be purchased separately.