Construction Insurance

Insurance is the keystone for managing financial risk in the construction process.  Insurance will not eliminate risk, rather it shifts most of the risk to a professional risk bearer, such as an insurance company.  Insurance coverages can be very complicated and each construction project and contract presents its own unique circumstances and challenges.  Some insurance coverages are required by statute.  Others are called for by the Owner in the contract.  Even when not required, contractors will often purchase coverage for certain risks to obtain an indicia of security and peace of mind.  While not exhaustive, the following lists types of construction insurance.

All-risk builder's risk insurance: Protects against all risks of direct physical loss or damage to the project or to associated materials caused by any external effect, with noted exclusions.

Named-Peril builder's risk insurance: Protection for the project, including stored materials, against direct loss by fire or lightning.  A number of separate endorsementsto this policy are available that add coverage for specific losses.

Bridge Insurance: This insurance is of the inland marine type and is often termed the "bridge builder's risk policy." It affords protection during construction against damage that may be caused by fire, lightning, flood, ice, collision, explosion, riot, vandalism, wind, tornado and earthquake.

Property Insurance on Contractor's Buildings: Affords protection for offices, sheds, warehouses, and contained personal property.

Contractor's public liability and property damage insurance: Protects the contractor from legal liability for injury to persons not in its employ and for damage to property of others, if the property is not in the contractor's care, custody, or control when such injuries or damage arise out of the operations of the contractor.