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Construction Project Insurance

For any member of the construction industry, insurance is a must. Construction project insurance is required by all states and the federal government in the United States. Any construction company doing business without construction project insurance will be fined heavily and run the risk of having their operations shut down entirely.

Construction project insurance differs from basic insurance in that the contractor must not only have insurance protecting their equipment and property, but the lives of their employees as well. They must also hold insurance in case they are liable for damages to the property belonging to their client--in many cases, the very thing they're building in the first place.

Construction project insurance requirements can vary by location and size of a product. In nearly all cases, the required insurance included general liability, workers compensation, protective liability and property insurance. Many contractors also purchase auto insurance if employees are using company vehicles for work related to the project.

Construction project insurance can vary for general contractors, heavy contractors and trade contractors. Three are policies for bridge contractors and concrete contractors, as well as insurance programs for more specific areas. Policies can be found for highway, street and road construction; heating, ventilation and air conditioning work and electrical work. There are even construction industry insurance policies aimed specifically for plumbing contractors and underground utility contractors.

In most cases, property owners will not allow a general contractor to bid on a construction project unless they have appropriate construction industry insurance. The property owner frequently, if not always, requires the contractor to prove their level of insurance when they submit their bid and proposal. The contractor must submit a document signed by their insurance agency noting their level of insurance and whether they are in good standing at that time.

Premiums for construction project insurance can vary based on the location of the project, the complexity of the project and the history of the contractor. A skyscraper built on a fault line will require substantially higher premiums than one built in a more secure area; correspondingly, a company with a good safety record will find themselves paying a lower premium than one that has a history high incident ratios and lost man-hours.

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