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Construction Insurance

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What is a construction insurance policy?

Construction Insurance

Construction insurance, also known as contract works insurance, is specifically designed for construction projects, offering protection against potential financial losses that may arise during the construction process.

Why is construction insurance neccesary?

Construction projects are full of risks, from accidental damage to sudden unforeseen events. But why is it important to have construction insurance?

Protection against potential losses

Construction sites can experience many issues like theft, vandalism, or natural disasters. Insurance helps cover the costs when these unfortunate events happen.

Legal and contractual requirements

Many contracts, especially larger ones, require parties involved in the construction process to have specific insurance coverage in place.

Peace of mind

Knowing that potential financial risks are covered allows everyone involved – from the site owner to the contractors – to focus on the job at hand without constant worry.

What is construction insurance Gerrards

What exactly does construction insurance cover?

Construction insurance covers physical damage or loss to a construction project. This includes:

  • Damages from natural disasters such as storms, earthquakes, or floods.

  • Vandalism or theft of equipment and materials on the construction site.

  • Accidental incidents leading to damages like a fire breakout during the construction phase.

How does one obtain construction insurance?

  • Start by assessing the risks associated with the construction project. Every project is unique, and understanding specific risks will help in choosing the right coverage.

  • Get multiple quotes from different insurance providers. This helps in getting the best price and understanding what different insurers offer.

  • Engage with an insurance broker, like Gerrards, who can guide you through the intricacies of construction insurance and help you choose the right one for your needs. We can also help assess the risks and obtain multiple quotes on your behalf. 

What is construction insurance Claim

What are the advantages and disadvantages of construction insurance?

When deciding on construction insurance it’s essential to weigh the pros and cons:

  • Financial Safety Net: Construction insurance provides a cushion against unplanned costs arising from damages or losses.

  • Enhanced Credibility: Having insurance can make a construction company more reputable in the eyes of clients.

  • Peace of Mind: Stakeholders can focus on the project without constantly worrying about potential financial implications from unforeseen events.

  • Additional Costs: Premiums for construction insurance add to the overall cost of the project.

  • Possible Claim Disputes: In some cases, there may be disputes with the insurance company about claims, leading to delays in compensation.

What are some common misconceptions about construction insurance?

  • “It covers everything.” Many assume construction insurance is an all-inclusive policy, but there are specific exclusions.

  • “It’s the same as liability insurance.” Construction insurance focuses on the project itself, not third-party damages or injuries.

  • “Once purchased, I can forget about it.” Regularly reviewing the policy is essential to ensure continued coverage adequacy. You may need to increase the policy limit if the project runs over budget or increase the duration if it doesn’t run to schedule. 

What are the steps to ensure you’re choosing the right construction insurance?

  • Understand Your Project Needs: Every construction project is different. Ensure you have a comprehensive understanding of your project to select the right coverage.

  • Review Policy Exclusions: Not everything might be covered. Make sure to understand any exclusions in the policy to avoid surprises later.

  • Regularly Review and Update the Policy: As the construction progresses, the needs and values might change. Regular reviews ensure that the coverage remains adequate.

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