Types of Construction Insurance – For example – a property owner undertaking a construction project could seek to insure a number of things related to the project—for example, the building, materials in transit, etc. Depending on the nature of the contract, a contractor for that same project might require different types of coverage, such as general liability and commercial auto insurance. Below is more information about the various types of coverage available. Need a notary bond?

1. Builders Risk (Course of Construction) Insurance

Builders risk insurance, also known as course of construction (COC) insurance, or sometimes construction all risk insurance, is insurance coverage for buildings and other structures while they are under construction. More specifically, the insurance policies will usually have options to cover the following types of property:

Insurance providers generally cover the most common types of construction projects, including:

However, if your construction project or type of structure is unique, there may still be specialty providers that can offer insurance policies for your unique project. Builders risk policies only protect against certain types of damages. Generally, the most basic builders risk insurance policies will cover damages caused by:

Typically, insurers will offer “premium coverage” options, which cost more, but can extend the coverage limits, insurable events, and/or insurable property for the policy. Damages from earthquakes or flooding will generally not be covered, unless coverage for those types of events is added to the policy. Insurance providers may also specify some exclusions in the policy that protect them from covering damages that occur under specific conditions or from policyholder negligence.

Read our course of construction insurance guide to learn more about builders risk insurance cost and see the best insurance companies. Need builders risk in Tennessee?

2. Commercial and Contractor General Liability Insurance

General liability insurance, sometimes called commercial general liability (CGL) insurance or contractor general liability insurance, is a class of insurance that provides liability protection to businesses in the case of bodily harm or property damage during the course of business. Insurance providers create various versions of these policies available to professionals in construction and for construction projects. Whether you are the property owner, a construction company, or a contractor, liability insurance policies are available to protect policyholders from unnecessary risk. So often, these plans will be advertised as Contractor General Liability Insurance or General Liability Insurance for Builders.

General liability insurance policies will usually cover a broad range of damages, including:

Contractors or developers may actually be required to have a minimum level of liability insurance either by law in some states or to win certain contracts that require it. Companies who complete many design-build projects will definitely want to have liability insurance in case they are sued for mistakes. Also, subcontractors are frequently required to carry liability insurance in order to work for certain general contractors.

General liability insurance policies are available through various providers for the following types of businesses:

Like Builders Risk and other types of insurance coverage, certain exclusions are likely to be defined in the policy, protecting the insurance company from having to cover certain types of damages or incidents.

3. Commercial Auto Insurance

Commercial auto insurance, or commercial vehicle insurance, isn’t exclusively available for construction projects. It is insurance intended to provide auto insurance to vehicles used by businesses. The coverage provided by commercial auto insurance is intended to help policyholders avoid high vehicle repair costs, medical expenses, or lawsuits resulting from auto accidents.

There are several coverage options for commercial auto insurance policies that mirror the coverage options of standard auto insurance policies. The standard coverage options include:

Insurance providers like Progressive  or Nationwide offer coverage for many types of commercial vehicles, including vehicles that are commonly used during construction projects. The following vehicle and trailer types are usually covered by insurers who offer commercial auto insurance:Vehicle Types

Trailer Types

It is wise to have a commercial auto insurance policy, even if you use your personal vehicle for business. Keep in mind that most personal auto insurance policies will exclude accidents while using your vehicle for business purposes from coverage.

If you’d like to learn more about commercial auto insurance policies for construction, visit our detailed commercial auto insurance guide.

4. Inland Marine Insurance

Inland marine insurance is another broad class of insurance that spans well beyond the construction industry. While the name comes from an era when this class of insurance covered primarily ocean-bound materials and vessels, that is no longer the case. Inland marine insurance coverage is has evolved to cover many types of property, including property in transit, mobile equipment, property in the custody of a repairman or storage facility, property commonly used in different locations, and even computer equipment and digital information.

For the construction industry “inland marine insurance” applies primarily to the tools and equipment used by contractors and developers. For this reason, in construction industry, it’s commonly referred to as “tool and equipment insurance” or “contractor equipment insurance”.

These insurance policies cover many types of property used by construction professionals, contractors, and developers, including:

Policies will cover items either at replacement cost or at the fair market value of the damaged or stolen items, and covered incidents for this type of insurance would include:

This class of insurance can also cover other costs that might be associated with the loss or damage of contractor tools and equipment, including:

5. Contractor License Bonds

Contractor license bonds are agreements, similar to insurance policies, which guarantee that a contractor will comply with the regulations that apply to their particular contractor license. The main difference between this and an insurance policy is that while the contractor is the one who purchases the bond, the bond is designed to protect the general public and anyone that the contractor does business with. Typically, insurance companies offer bonds, even though they are not quite the same as insurance policies.

The cost of the bond to the contractor usually depends on the contractors historical track-record of income and their credit score. And the better track record a construction specialist has, the less expensive the bond will be for them.

Certain states, industries, and types of construction contracts will require contractors to carry a contractor license bond, and in some cases additional bonds will be required.

To find more information about license bonds for the construction industry, refer to this thorough guide on contractor license bonds and how they work.

6. Construction Bonds

Construction bonds, also known as contract bonds, exist to “guarantee” certain aspects of a contract or construction project, and ultimately that the project contract is guaranteed to be completed if accepted. There are several types of contract bonds, which are:

7. Workers’ Compensation Insurance

Workers’ compensation insurance, also known as workers’ comp or workman’s compensation, is insurance coverage designed to protect businesses and contractors when their employees are injured while on the job. It does this by covering the following costs after a covered incident:

Workers’ compensation insurance, like others on this list, spans beyond just the construction industry, but it is an important piece of coverage for developers and contractors who plan to employ others who stand any chance of injury on the job. In fact, workers’ compensation insurance is required by law in some states.

AmeriAgency Insurance offers you comparative quotes from companies like Progressive, Nationwide, and The Hartford for all types of construction insurance, including general contractors, plumbers, HVAC technicians, electricians, framers, roofers and others.