Does Construction Company Insurance Protect Your Profits?

The short answer is, yes. Construction company insurance can protect your building profits. However, it important to note that construction company insurance is not one just policy that protects your business from all financial risks. In fact, construction company insurance is not an insurance policy at all. Confused?

Reduce your financial risk

A contractor business like yours invests in insurance to reduce financial risk, right? But there are a number of different risks that you face in the course of doing your job. For example:

• Bodily injury to a third party – For example, your client shows a visitor around your construction site and they trip over some equipment or building materials. They could bring a claim for bodily injury. Your Contractors Liability coverage offers protection in these instances.
• Property damage – For example, your employee drops heavy tools onto a neighbor’s garden paving. They could sue you for property damage. Once again, your Contractors Liability coverage will protect you.
• Fire damage – For example, the building that you are renovating is damaged by fire. Your Contractors Liability insurance will not pay out, but your Builder’s Risk Insurance will.
• Profits – For example, damage to the new building you are construction results in loss of profits. Your Builder’s Risk Insurance will reimburse a percentage of profit earned as of the date of the loss

What is Construction Company Insurance?

No one policy provides protection for third party claims, employee injuries, commercial vehicle theft, and project profits. Construction company insurance is an umbrella term for the group of policies that you purchase to protect your contractor business. Every contractor business faces different risks, which means that every construction company insurance program must be customized.

But, what about your profits?  

Your building project profits can be protected by a Builder’s Risk policy. This is course of construction coverage, which means that it is project specific and is valid only for the period of construction.

In case of damage to the structure, you could be reimbursed for a percentage of profit earned as of the date of the loss. Damage could be as a result of:

• Fire
• Vandalism
• Weather

Builder’s Risk Insurance

Builder’s Risk Insurance is designed to protect buildings and structures that you are building, renovating or remodeling. It provides coverage for the costs of construction, the equipment and building materials being used in the construction project, property replacement costs, and loss of profits.

It is important to note that Builder’s Risk Insurance is not day-to-day coverage like you have with Contractors Liability Insurance or an Inland Marine policy.

For instance, with Builder’s Risk only the building tools and equipment that is being used for that particular project has protection from theft, whether from your construction site, from the place of storage or in transit.  Inland Marine is coverage that goes wherever you go. Your equipment and tools will be covered for all your projects, not just one.

Construction Company Insurance Advice

However, a Construction Company Insurance program with Inland Marine instead of Builder’s Risk will cover equipment theft, but not your profits.  Should you have both? Get professional advice from our experienced insurance consultants. Call Builders Risk.net at 877 960 0221.