8 Essential Tips for Selecting a Construction Insurance Policy
When completing any type of construction, the potential for risks—including damages and fires—is an unavoidable possibility. Thus, having the right construction insurance policy is essential for all construction projects.
To ensure your project is effectively covered in the event of any foreseeable or unforeseeable risks, it’s important to understand how to select the right type of coverage. Here are eight tips for choosing the best construction insurance policy to meet your project needs.
1. Consider the potential risks
The initial step to finding the right construction insurance policy for you is properly assessing your needs and any potential risks. Taking the time to evaluate the extent of your project allows you to better understand the problems you may need to manage and, therefore, the type of coverage required. Construction insurance comes in a wide variety of policies, so it’s important to choose the one that will best cover your needs.
Construction can be a long and difficult process, and there are many risks involved in a commercial construction project. Luckily, construction insurance, or builder’s risk insurance, is designed to cover your construction jobs from start to finish.
2. Don’t underestimate basic coverage
Something that often gets overlooked is the ability to add coverage onto an existing plan. It’s better to start out with a basic insurance policy until you understand the full extent of your project rather than have coverage you don’t need.
A common type of construction insurance is known as commercial general liability, which typically helps cover third-party injuries and property damage. At the beginning, you want to ensure you’re protected against the most common risk scenarios before narrowing in on the unique project-specific ones.
During the construction process, you need to safeguard your project with construction insurance. Builder’s risk insurance will help protect you against many things, such as direct damage to the project (for example, a fire while under construction), as well as things like project interruption costs and wrap up liability insurance.
3. Be prepared to add additional protection
Once you have established your basic coverage options, consider what the project-specific needs may be. Some factors, such as weather, pollution, and/or the type of trade you’re in, will help inform the kinds of upgrades you should make to the existing policy. The different changes or additions you make to your construction insurance will depend on the specific kind of construction project your business will be undertaking.
James Campbell Insurance can help provide you with the flexibility you need to choose the right level of insurance so your business is covered no matter what happens.
4. Ask about what the policy does not cover
As important as it is to understand what coverage is provided by your construction insurance policy, you should also be aware of what is excluded. Whenever you choose an insurance coverage option, there will be a list of perils that are not covered—these are known as exclusions. Before signing off on any construction insurance policy, ensure these factors are explained to you in detail.
Construction insurance will specifically cover the building, construction materials, and liability in the event of any physical loss or damage caused by an insured event. Your builder’s risk insurance policy can be tailored to your needs to ensure that you have the proper coverage for every step of the process.
5. Use bundling to your advantage
Depending on the type of coverage you require, there may be more value in bundling multiple different policies with one insurance carrier rather than spreading it out across different companies.
If you’re looking, for example, to insure more than one vehicle or obtain more than one type of insurance (such as liability, property, etc.), then it could be beneficial to find a single insurance provider who carries multiple products. In some cases, you may even be eligible for a multi-policy discount or loyalty program that will help make the coverage more affordable.
The responsibility of securing builder’s risk insurance to cover a construction project usually falls to the property owner. Once you finalize the details of your construction project, be sure to identify who will be responsible for purchasing the policy and make certain that all parties involved are covered.
6. Conduct yearly reviews of your policy needs
Reviewing your policy needs may not be as necessary in the short term; however, for ongoing construction projects, it’s important. As more time passes, the needs of your specific project will evolve, and you want to make sure your insurance policy does, too.
Whether you acquire new vehicles, your business status changes or the extent of your project expands, having the right coverage is essential. When new changes are made, you need to consider whether the existing construction insurance policy should be restructured to cover new potential risk exposures.
7. Practice proper risk management and loss prevention
The best method for protecting against risks is taking the right steps to avoid them altogether whenever possible. Proper risk management can be extremely beneficial in ensuring you remain protected.
If you aren’t sure how to implement proper risk management, consulting your insurance broker can help provide better support for staying ahead of risks.
8. Find a policy that suits your budget
In many different scenarios, having a clear budget set out for your construction insurance policy will help protect you against overspending. Comparing different insurance policies makes it easier to understand your options and find the cost that suits your budget.
However, finding a reasonably priced insurance policy doesn’t necessarily mean your coverage will be inadequate. The exact cost of your construction insurance policy will differ based on the project and the services offered. The premium will be determined based on several factors related to the construction business and the type of construction work being done.
How to Find the Right Construction Insurance Policy
Construction projects are often lengthy and time-consuming endeavours. Although a certain degree of risk can be anticipated ahead of time, it’s still necessary to plan for the unexpected.
Fortunately, a construction insurance policy can help cover a range of potential risks, including property coverage, project interruption costs, pollution and clean-up removal, wrap up liability insurance, and completed operations.
To book a consultation with one of our insurance experts at James Campbell Insurance, you can call us at 1-833-459-1065 or contact us here.