Despite the high investment involved in construction industry, accidents may cause injuries and death of the workers or damage of the property as the sites involves working in great heights, with dangerous tools, toxic materials and under tunnels which may cause the company to incur considerable losses. To be able to cover the risks that may occur causing injuries to the workers and leading to losses, the construction firm must have construction business insurance. In construction accidents, the construction company requires to pay 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, damage of material and structure among other risks which the construction business insurance can cover on their behalf.
The two types of construction business insurance policy are all risk policy and a specified peril policy. 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. With a specified peril insurance policy, the construction company will only expect compensation if any of the risks listed on the contract with the insurance company occurs. Purchasing an all risk insurance policy is more expensive but covers a broad range of risks.
A general contractor insurance is a must have for every contractor during a construction project. Accidents, negligence or damage that occurs after the working hours are covered by general contractor insurance. contractual liabilities, lawsuits, and accidents can be avoided by purchasing a general contractor liability. The cost of this insurance is determined by risk levels, the total payroll expenditures, the company’s gross receipts, the type of work done, and the amounts coverage that they require.
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. Risks consultants take care of legal matters so that the contractors can focus on construction.
Finally, to ensure financial security of a construction company, it is important to have construction liability insurance. Purchasing a comprehensive liability insurance ensures that any type of accident is covered by the insurance company.