The construction industry is one of the sectors that involve a lot of investment and risk as the workers has to work in great heights, with dangerous tools, toxic materials and under tunnels hence the possibility of an accident is very high. Having construction business insurance helps the company to cover for such great losses that may occur during the project. The construction business insurance covers for medical treatment charges to the injured worker as well as compensation to their family in case they are deceased, cost of remodeling or repairing a construction site in case the buyer is not pleased with the construction work, provides financial assistance to the construction company in case of damage of material and structure and also covers any other unexpected risks that a construction company may face.
The construction business insurance policy is available in two categories namely all risk insurance and specified peril insurance. All risk insurance policies provides compensation to the contractor and the homeowner in case of any risk during the project. To cover every possible construction risk, the company can opt for an all risk insurance policy. The specified peril insurance policy only offers compensation to the contractor in case any of the risks that have been listed in the contract agreement occurs. Although purchasing an all risk insurance company is expensive, the construction will always be totally insured.
Every contractor working on a project should ensure that they have general contractor insurance. Accidents, negligence or damage that occurs after the working hours are covered by general contractor insurance. It also reduces the chance of the company being on contractual liabilities, lawsuits, and accidents. The higher the company’s level of risk, total payroll expenditures, gross receipts, risk coverage amount and the type of work they do, the higher the amount of general contractor insurance.
Due to improper fund allocation for projects, poorly scheduled timing for a specific project, or miscommunication with international clients that lead to disagreements and misunderstandings a construction company may face management issues which can be prevented by hiring risk consultants. The risk consultant has the role to help the construction company to recover from debts and assist in claim defense. The risk consultant that a construction company hires should have the experience and enough knowledge to handle claims against the company and file claims on their behalf. With risk consultants the construction company does not have to worry about the legal issues hence the can be able to get their job done properly.
Finally, it is important for all construction companies to have construction liability insurance for security against damage of property and injury of their workers. A comprehensive liability insurance ensures that all types of risks are covered.