There are many different types of construction insurance policies available on the market. As a business owner in the construction industry, it is important to understand the different types of construction insurance coverage available and how they can protect your business.
In this blog post, we will discuss the main types of construction insurance policies and what they cover.
Main Types of Construction Insurance
Contractor’s Insurance and Property Developer’s Insurance are the two main types of construction insurance. Both types of construction insurance have different coverage options that can be tailored to meet the specific needs of businesses in the construction industry.
Contractor’s Insurance
Building contractors insurance is designed to protect businesses that provide services related to the construction industry. This type of construction insurance typically covers liability risks, such as injuries that occur on the job site or damage to property caused by the contractor’s work.
The following are some of the different types of building contractor’s policies available.
Contractor’s Combined Insurance
This includes:
- Contractor’s All Risk Insurance is a type of construction insurance that provides protection for a contractor against all risks associated with their projects. Contractor’s all risk insurance includes protection against loss or damage to the construction project itself, as well as public liability coverage for any injuries or property damage that may occur as a result of the contractor’s work. It is typically required by lenders in order to provide financing for construction projects. It is also often required by the owner of the property on which the contractor will be working. All risk insurance can ultimately save a contractor a great deal of money in the event of an accident or other unforeseen event.
- Contract Works Insurance is a type of construction insurance that provides protection for businesses that are involved in construction projects. The policy covers the costs of repairing or completing a project if it is damaged or destroyed during the construction process. It can be purchased by the business owner or the contractor, and it is typically valid for the duration of the construction project. In the event of damage or destruction, the insurer will reimburse the business for its losses, up to the limit of the policy. It can help to protect businesses from financial ruin in the event of a construction accident.
JCT Insurance
JCT insurance is a type of policy that covers the costs of construction projects. It is designed to protect against the risks of delays, cost overruns, and other problems that can occur during construction.
It is typically purchased by the owner of the construction project, and it can cover both the contractor and the sub-contractors.
Legal Indemnity Insurance
Legal indemnity insurance is a type of policy that provides protection for individuals or businesses in the event that they are sued or held liable for damages. It can help to cover the costs of legal defence, settlement, and damages if the insured is found to be at fault.
It can be an important part of a contractor’s business insurance, as it can provide protection in the event that the contractor is sued or held liable for damages.
This can include:
- Planning and Building Regulations Insurance
- Absence of Easements Insurance
- Restrictive Covenants Insurance
- Rights of Light Insurance
Professional Indemnity Insurance
This protects you from financial damages if you are found legally responsible for injuring someone or damaging their property. If you are sued, professional liability coverage can help pay your legal costs, including attorney’s fees and court judgments. Even if you win the case, these costs can add up quickly. A contractor’s liability policy can help protect you from these financial risks.
Professional Indemnity Insurance can be tailored to the type of contractor concerned and can include:
- Demolition Insurance
- Scaffolders Insurance
- Roofers Insurance
- Welders Insurance
- Steel Erectors Insurance
- Waste Removal Companies
- Piling Contractor’s Insurance
- Asbestos Contractor’s Insurance
- Ground Workers Insurance
- Scrap Metal Liability Insurance
- Air Conditioning Engineers Insurance
- Building Contractor’s Insurance
- Basement Contractor’s Insurance
- Plumbing and Heating Insurance
- Civil Engineers Insurance
Fleet Insurance
In the context of contractors, fleet insurance is a type of policy that covers a contractor’s commercial vehicles. This can include anything from cars and vans to trucks and trailers.
Fleet policies can provide protection for both the contractor and their employees in the event of an accident or other incident. They can also help to cover the costs of repairs or replacement vehicles.
Contractors who have a fleet of vehicles should make sure that they have adequate commercial auto insurance in order to protect themselves and their business.
Building Warranties Insurance
This is a type of contractor’s policy that provides protection for the builder in the event that defects are found in the finished product.
Building warranties insurance policies can help to provide peace of mind for both the builder and the homeowner, and can help to protect the investment that has been made in the property. In some cases, the cost of replacement materials may also be covered if they are needed to fix a problem.
For contractors this can include:
- Latent Defects Insurance
- Performance Bonds Insurance
- Structural Warranty Insurance
Property Developer’s Insurance
Property developer’s policies are designed to protect construction companies that are involved in the development and construction of new properties. This type of policy typically covers risks related to the construction process, such as delays in the project or damage to the property during construction.
The following are the types of policies available for Property Developers. As you can see there is some overlap between Property Developers and Contractors business insurance.
Property Insurance
Property insurance is a type of policy that helps to protect buildings and other structures from damage. It can cover losses such as fire, theft, vandalism, and storm damage. It can also help to cover the cost of repairs or replacement.
For property developers, this type of policy can help to protect their investment and ensure that they are able to complete their project on time and within budget.
In the event that a property is damaged or destroyed, property insurance can help to cover the cost of repairs or replacement. This type of policy can also help to cover the cost of lost rental income if a property is unavailable for rental due to damage.
Property insurance policies are an important part of any property developer’s business plan.
Building Warranties Insurance
When it comes to property development, there are a lot of different risks that need to be considered. One of the most important is the risk of defects in the finished product.
Building warranties insurance is designed to protect developers against these risks, covering the cost of rectifying any defects that may be found. The cover typically lasts for a period of 10 years, giving buyers peace of mind that their new home is built to a high standard.
Examples of types of Building Warranties for property developers:
- Latent Defects Insurance
- Performance Bonds insurance
- Road and Sewer Bonds
- Structural Warranty Insurance
Property Owner’s Insurance
A property owners policy is vital for property developers. It protects them from any financial loss arising from damage to their property, as well as from any legal liability should someone be injured on their premises.
While many people think of property insurance as only being for homes, it is actually a very important type of policy for any type of property owner, whether they own a home, an office building, or a retail store.
In the event that something happens to your property, such as a fire or severe weather damage, your property insurance will cover the cost of repairs or replacement. Similarly, if someone is injured on your property, your liability policy will help to cover their medical bills and any legal fees that you may incur.
Without this type of business insurance, you would be financially responsible for all of these costs, which could quickly add up and put you in a difficult financial position.
The following are different types of Property Owner’s Insurance:
- Unoccupied Property Insurance
- Undergoing Renovation Insurance
- Property Owner’s Liability Insurance
- Land Liability Insurance
JCT Insurance
As mentioned earlier, JCT insurance is a type of policy specifically for property developers. It covers the costs of any damage to the property that is caused by the construction process, as well as any third-party claims that may arise from the construction work.
It is an important part of the development process, as it provides protection for both the developer and the future occupants of the property.
Without this type of policy, developers would be liable for any accidents or damage that occurred during the construction process, which could potentially cost them a great deal of money.
Self Build Insurance
Self build insurance is a type of property developers policy that covers the costs associated with building your own home.
This can include the cost of materials, labour and any other expenses incurred during the construction process. It’s important to get self build insurance in place before you start any work, as it can help to protect you financially if anything goes wrong.
For example, if you need to make changes to your plans half-way through the build, or if you encounter any problems with the quality of materials or workmanship, your self build insurance can cover the additional costs.
Contingent Liability Insurance
When you are developing a piece of property, there are a lot of risks that you have to account for. One of the biggest risks is the possibility that something will go wrong and you will be held liable.
Contingent liability insurance is designed to protect you in this scenario. If something does go wrong and you are held liable, your policy will cover the costs.
This type of policy is especially important for property developers because the risks are often high and the consequences can be severe. Without contingent liability insurance, a single mistake could ruin your business. With it, you can rest assured knowing that you are protected against this type of risk.
Contractor’s Combined Insurance
A contractors combined policy covers the cost of any damage to property that occurs during the construction process, as well as any legal liabilities that may arise.
This type of policy is essential for property developers, as it protects them from any financial losses that could occur if something went wrong during the construction process.
Without a contractors combined policy, property developers would be at risk of having to pay for any repairs or replacements themselves, which could potentially bankrupt them.
Legal Indemnity Insurance
Legal indemnity insurance is a type of policy that helps to protect property developers against potential legal liabilities.
When developing a piece of property, there are a number of potential risks that could lead to a legal liability. For example, if the property is found to be in violation of zoning laws, the developer could be sued by the local government. Or, if the property is found to have environmental hazards, the developer could be liable for any resulting harms.
Legal indemnity insurance can help to protect developers against these and other potential liabilities, providing them with financial security in case of a lawsuit. It can be an essential tool for mitigating risk in the development process.
For property developers this could include:
- Planning and Building Regulations Insurance
- Absence of Easements Insurance
- Restrictive Covenants Insurance
Choosing the Right Type of Construction Insurance
When choosing a construction insurance policy, it is important to work with an experienced broker, like Construction Insure, who can help you select the right coverage for your business. Make sure to review your construction insurance policy carefully to ensure that it meets your business’s specific needs. With the right policy in place, construction companies can protect their businesses from a variety of risks associated with the construction industry.