The Ultimate Guide to Construction Risk InsuranceSecuring your construction business against unforeseen circumstances is not just a good idea — it’s vital to keeping everything up and running. After all, construction is a risky business all around, and at some point in time, the odds are that something unfortunate will arise that will cause your business problems. It could be something that simply puts a project way behind schedule. It could be something that causes damage to equipment, property or even injury to another person.

Managing this risk means having the right kind of insurance and bonding, but too many company owners are confused as to what kinds of coverage they need. Read our comprehensive guide to construction risk insurance, including where to go for the best surety bonding services to protect your business.

Construction Risk Insurance

Construction risk insurance is a type of property insurance which is also called builder’s risk insurance. It applies to buildings that are under renovation or new construction. It exists to help manage and transfer the risk of something going wrong. It allows you to cover your workers, materials and the structure itself. It will cover theft, fire, lightning, explosion and a range of other catastrophes. You can also purchase coverage for things like floods, earthquakes and the like.

What Kinds of Construction Does It Cover?

Construction risk insurance covers a wide variety of jobs. It doesn’t matter whether you’re working residential or commercial jobs, builder’s risk insurance will cover the job. It does not, however, cover issues that arise from the use of poor materials, fault design, or poor workmanship.

Is Insurance Legally Required?

The courts vary from place to place regarding the legal requirements of carrying instruction. While bonding is required across the United States for licensing and operations, varying levels of insurance may or may not be requisite in different states.

Statistically speaking, over half of all construction professionals make use of insurance in order to manage risks in the industry. Your policy will likely cost up to 4 percent of the overall cost of a project, a small price to pay for an important safety net.

The Benefits of Construction Risk Insurance

There are a range of benefits to maintaining a solid risk insurance policy. It’s important in preserving your financial wellness as it will compensate you against covered losses. It can protect you, with the right customized policy, against just about any form of disaster.

Another benefit is that you can customize your coverage. It can cover your whole business or one project. It can also be a big help in getting bank loans and might even be a prerequisite. It helps to solve disputes and protect you against loss in general.

Bonding vs. Insurance

There’s a difference between surety bonding and insurance. Bonding exists to cover you against many of the things insurance doesn’t cover — if you can’t complete a job due to unforeseen circumstances, a surety bond will step in to cover the contract. It’s a guarantee of your ability to live up to your responsibilities.

Bonding is also a prerequisite to operate overall. If you’d like more information about how you can get bonded and compete with even bigger companies, National Surety Services can help. Give us a call for more information or to secure your next surety bond today!