Running a construction business comes with risks at every stage, from equipment damage to worker injuries and project delays. Having the right insurance policies in place is critical to protect your business, your team, and your financial future.
In this guide, we’ll break down the most important construction insurance types contractors should understand, whether you’re building homes, managing commercial projects, or working as a subcontractor.
General Liability Insurance
General liability insurance is the foundation of any construction company’s risk management plan. This essential coverage helps protect your business from claims related to bodily injury, property damage, or personal injury that can occur during your work.
For example, if a visitor trips over equipment on your site or your team accidentally damages a client’s property, general liability insurance can help cover legal expenses, medical bills, and repair costs.
Workers’ Compensation Insurance
Construction sites are high-risk environments. Workers’ compensation insurance provides critical protection by covering medical expenses, rehabilitation, and lost wages if an employee is injured on the job. In most states, this coverage is legally required if you have employees.
Without workers’ compensation coverage, even minor injuries could result in costly claims that threaten your business operations.
Builder’s Risk Insurance
Also known as course of construction insurance, builder’s risk policies cover structures under construction. This policy helps protect against damage from fire, theft, vandalism, or certain weather events throughout the build process.
Builder’s risk insurance is essential for general contractors and project managers overseeing new builds or major renovations. It can be structured to cover materials, labor, and the full value of the project.
Commercial Auto Insurance
If your construction company uses vehicles to haul materials or transport crews, you need commercial auto insurance. Personal auto policies typically don’t cover vehicles used for business purposes, even occasionally.
Commercial auto insurance helps protect your business vehicles and drivers in case of accidents, property damage, or injuries caused while driving for work.
Inland Marine Insurance
Despite the name, inland marine insurance covers your tools, materials, and equipment while in transit or stored off-site. Whether you’re moving materials between job sites or temporarily storing expensive tools, inland marine insurance helps protect your equipment from theft, damage, or loss.
Contractor’s Pollution Liability Insurance
Construction projects can expose your business to environmental risks, from fuel spills to improper waste disposal. Contractor’s pollution liability insurance helps cover cleanup costs, property damage, and bodily injury claims related to pollution incidents.
While not every contractor needs this coverage, it’s important for businesses working with hazardous materials or involved in excavation projects.
Umbrella Insurance
Umbrella insurance provides an added layer of protection over your existing general liability, commercial auto, or workers’ compensation policies. If your primary policy limits are exhausted by a large claim, umbrella coverage can help cover the excess costs.
For contractors handling larger projects or managing multiple job sites, umbrella insurance can provide essential financial protection and peace of mind.
Why Construction Insurance Matters
Running a construction company means managing risks every day:
- Workers face hazards on every job site.
- Tools and equipment are moved and used constantly.
- Vehicles operate under demanding schedules.
- Projects are exposed to theft, vandalism, and severe weather.
The right insurance policies protect your workers, your equipment, your projects, and your profitability. Without proper coverage, one serious incident could jeopardize your entire operation.
Build a Stronger Future With the Right Coverage
Whether you’re a small contractor or a multi-state construction company, having the right insurance isn’t optional; it’s the foundation of a professional, protected business.
Working with an experienced insurance provider can help you build a customized coverage package that meets project requirements and protects your bottom line.
At InsuranceHub, we help construction professionals understand their risks and choose the right protection for their projects and teams. Ready to get started?
Contact InsuranceHub today to discuss your construction insurance options.
Disclaimer: This article is for informational purposes only and does not constitute legal or insurance advice. Please consult with a licensed agent to discuss your specific business needs.