A successful construction project is the result of meticulous planning, the use of sophisticated machinery and tools and the coming together of several skilled workers. With so many factors at play, the site is also often fertile ground for mishaps that can be quite expensive if the contractor is not insured. So, here is a look at the various issues that a construction company may be faced with if they do not have the proper insurance for construction project and the different policies that can help a company to mitigate the various risks associated with construction projects.

How can you protect your material and machinery?

Most insurance providers have established that contractors are susceptible to the risk of material damage and there are several policies in the market to mitigate the losses that may result from such an occurrence. The coverage may not only include the material used in the construction project but also cover the machinery used to complete the job.

The policies that protect a contractor from such a risk include the contractor plant and machinery coverage and also the all risk policy. A contractor who is not insured against material and machinery damage may have to incur heavy losses in case of situations that destroy the material and the tools and machinery used on the construction site.

What can protect from third party liabilities?

A contractor will need insurance for construction project not only to protect the company from third party claims related to worker injury but also these policies are vital if a neighbor or any person in the vicinity of the construction site has to sustain bodily injury.

The contractor may be liable for all third party claims resulting from personal injury as well as property damage. In order to avail coverage for such liabilities a construction company should purchase insurance policies such as the public liability policy, worker’s compensation, and other forms of employer liability policies.

Should you also protect yourself from damages that occur due to environmental and other factors?

Even after protecting himself against employee and third part claims and the possibility of material and machinery damage, a contractor will still be vulnerable to risks associated with damages caused due to environmental and other disruptive.

Policies such as Civil engineering completed risk insurance and Erection All risk policies will protect a construction company against damages resulting from factors such as floods, fire, earthquakes, hurricane, strikes, civil unrest, riots, theft and vandalism etc.

This type of insurance for construction project offers more comprehensive coverage and is highly recommended for projects that entail large investments form the construction company.

What about protection from loss of profits?

In some cases, a contractor may be faced with the very real possibility of loss of profits because the project could not be completed by the deadline. For the contractor this would mean loss of all the money that was invested in the labor and machinery and in many cases all the material used for the project. Fortunately, there is a policy that can protect you from such a situation; this type of insurance for construction project is known as advance loss of profits policy and it protects you against the loss of anticipated income/profit from a project.

What type of insurance are you legally obligated to possess?

While insurance for construction project offers protection from various forms of damages and liabilities; by law, a contractor is only required to have employee liability insurance so the safety of all the workers and employees is assured. The contractor will need to provide safety equipment including safe pants, helmets, proper tools and equipment to ensure that the employees are working in conditions which can be considered safe under the terms of such a policy.