Builder’s Risk Insurance vs Workers Compensation

Insurance is a complex matter for contractors. You need to protect your own people, buildings, tools and even consider Workers Compensation for sub-contractors.

Maybe you’ve laid down a plan you’re pretty happy with. But are you clear on the ins-and-outs of each policy? Modern-day construction claims reach $10 million or more, easily.

In this article, we will compare Builder’s Risk and Worker’s Compensation Insurance. Let’s look at some scenarios, and how each policy applies.

Scenario 1: Fire on-site

A fire breaks out on the site overnight. It gets into tar and lumber, causing huge amounts of damage to the site. Fire on a construction site is deadly. While only 0.2% of all fires are construction fires, they cost the industry $300 million in 2017.

This is what Builder’s Risk is for. It protects property from non-liable, external damages like fire, wind, rain, vandalism and theft while the job is ongoing.

Scenario 2: An employee has a fall

An employee fixing some framing falls off a ladder. It’s just one floor down, but they’re injured and off work for weeks. Falls cause the most workplace injuries overall, and more in construction. Workers Compensation pays for lost wages and medical bills if your employee gets hurt or sick on-site.

AA&P put construction’s non-fatal injury rates 71% higher than any other industry. There are many ways a worker can get hurt, so Workers Comp is a legal requirement for contractors in every state. Another consideration is Workers Compensation for sub-contractors – if the worker is one. You may not require Workers Compensation for sub-contractors who work alone. Whether they’re considered your ‘employee’ or not differs by state. Double-checking is always wise.

Scenario 3: Sub-contractors

A sudden storm blows your roofer’s worker from the roof. He’s alive, but injured. You’ve also lost a large amount of materials. This is another key aspect of Workers Compensation for sub-contractors.  Any sub using employees must carry their own policy. Reading the contract and making sure their own employees are covered is the best practice.

This in an industry with more risks than most: OSHA estimates 150,000 construction site accidents per year. Builder’s Risk will protect the cost of the lost materials. It can also be extended to pay for pollutant cleanup if, for instance, chemicals from the spill leak into the groundwater. Builder’s Risk is versatile. It can be adapted to cover many such ‘causes of loss.’ Such as, property in transit, water buildup and temporary structures.

Workers Compensation for sub-contractors 

No doubt about it, construction is high-risk. You have to protect your own workers, while making sure there is Workers Compensation for sub-contractors on the job.

You also have to protect your tools, your equipment, your scaffolding, and of course the property with Builder’s Risk. It can be stressful to get it all in order. But we can help. We will assist you in finding the best possible coverage plan for your business. Call Builder’s Risk on 887 960 0221.