Insurance coverage is one of the most important tools that contractors can use to manage the many risks associated with construction projects. Because of the variety of risks involved in construction work, insurance agents should work closely with their contractor clients on each construction project to identify all possible losses and help them choose the proper coverage to mitigate them. Here are 5 of the most commonly used coverage options for contractors.
1. Commercial General Liability Insurance
General liability insurance, commonly referred to as commercial general liability (CGL) insurance, is usually the first choice and most common type of insurance coverage that a contractor will seek out. However, while CGL creates a great base for coverage, it does not offer total liability protection. A standard CGL policy protects against general liability claims related to bodily injury and property damage, but can leave significant gaps in coverage, depending on the type of construction project that a contractor is managing.
2. Builder’s Risk Insurance
Builder’s risk insurance can protect a contractor and any named insured parties from certain perils while a building under construction. Depending on the project’s contract, the purchaser of the builder’s risk policy may name the owner of the building, the general contractor and any subcontractors as insured parties. Most builder’s risk policies will cover the building’s structure itself in additional to including coverage for construction materials and equipment on site. Builder’s risk insurance is typically written only for a specific amount of time, expiring once the construction is complete or the length of time is exceeded. Additional coverage may be purchased in the event of delays.
3. Professional Liability Insurance
Professional liability insurance is typically thought of as a more white-collar business insurance coverage, but it can be valuable for contractors too. When contractors delve into design and consulting work, they are leaving themselves vulnerable to errors and omissions liabilities. This risk can be mitigated by adding professional liability insurance, also known as errors & omissions (E&O) insurance, to their existing coverage.
4. Contractor Pollution Liability Insurance
Contractors pollution liability (CPL) insurance is a contractor-based policy which is offered on a claims-made or occurrence basis. It provides third-party coverage for bodily injury, property damage, defense and even cleanup resulting from sudden, accidental or gradual pollution conditions that arise from construction operations
5. Umbrella Liability Coverage
An umbrella policy is most useful for contractors who operate larger or multiple construction sites. It allows contractors to extend the limits of their existing coverage, in the event that damages exceed their basic policy limits.
About American Team Managers Insurance Services
Founded in 1998 by Chris C. Michaels, American Team Managers Insurance Services (ATM) has provided wholesale and MGA services to more than 5,000 independent insurance agents throughout the United States. Our goal is to establish close, long-term relationships with our agency partners and insurance carriers and provide competitive products for the Exclusive and Non-Exclusive markets that we serve. For more information on our products and services, give us a call at (714) 414-1200 to speak to a representative.