Expert Strategies & Tips for Buying Construction Insurance

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As a builder, you likely understand the dangerous nature of your work.

Construction insurance can protect you and your employees from potential bankruptcy when there is an accident.

Construction Insurance

What Is Construction Insurance?

Builders insurance can also be called builder's risk insurance or course of construction insurance.

General Contractor insurance requirements are designed to protect your company if your project is damaged by acts of nature, like tornados or fire, or through human interference, such as vandalism or theft.

Construction liability insurance may also include liability coverage if your project or workers cause injury or property damage to a person outside the project. 

Workers' compensation is also included and protects your employees if an injury occurs on the job.

Should a General Contractor Have Insurance?

Because there are so many risks associated with construction projects, builders need construction liability insurance more commonly referred to as builders risk insurance.  

A builder can suffer severe financial losses without the proper business insurance coverage

Construction can be dangerous for employees and others visiting your project.

Materials and tools are stolen from construction sites often, and vandals often damage sites as well.

Because of all of these foreseeable risks, you should consider many types of construction insurance. 

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Do I Need Builders Insurance?

If you own a building company, you definitely need insurance.

You'll need the workers' compensation as required by law, along with other types of coverage.

Construction Insurance

You never know what may happen when working in construction, so it's worth the cost of the premium to avoid paying a lot if the worst happens.

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What Insurance Does a Builders Company Need?

There are several types of insurance builders need.

General Liability

Commercial General Liability coverage ensures that you're protected if something goes wrong on the job site and someone else (other than an employee) is harmed. 

It'll also protect you if your construction damages someone's property.

Builder's Risk

Builder's risk encompasses a variety of types of coverage. It covers various incidents from fires to natural disasters to theft/vandalism. 


Your coverage can replace materials that are damaged or even cover things like additional interest you may have to pay due to a setback.

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Other Insurances General Contractors May Consider?

Depending on the nature of your business, you may want to consider other types of coverage.

Commercial Vehicle Insurance

If your workers drive trucks or other types of construction vehicles, you'll want insurance to cover them.

Tools & Equipment

If you take your construction tools to a jobsite or use your crane on a jobsite and something gets stolen or damaged, it would not be covered by your commercial property insurance because it was not on the premises. You have to get a mobile tools and equipment policy for that. 

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How Much Does Construction Insurance Cost?

The cost of builders insurance will vary based on the size and scope of your project.

A basic builder's risk policy is typically between 1-4% of the total project cost. 

Workers' compensation costs will be higher for builders, as the job is more dangerous than some other industries. 


The cost will be based primarily on how many risks are involved with the type of construction you do.

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