Being and Running a construction business is a daunting task. Don’t you think that this is the time when a construction firm needs construction insurance coverage?

Now that we are talking about construction insurance and insurance on buildings – first, you need to agree on a point that risk in construction businesses can come from any situation. There is a risk of fire, damage to property, injury to the workplace, and whatnot. To mitigate such risks in the construction industry – there are a number of insurances available to protect construction companies, property owners, and other stakeholders.

Major types of construction insurance include construction business insurance, general contractor insurance, workers’ compensation, professional liability insurance, commercial auto insurance, property insurance, etc. What type of insurance for construction company to be finalized – depends on your business needs.

We will see all types of construction insurance later in this same article, along with general liability insurance.

What is Construction Insurance?

To start with – construction insurance is a very broad term. You can say it’s kind of an ocean.

The term “construction insurance” refers to a wide variety of products designed to safeguard individuals and businesses during building projects. The word “construction insurance” is sometimes used interchangeably with “builder’s risk insurance,” although it does not refer to a specific kind of insurance for a construction project.

The specific construction insurance needs of an individual firm or construction project depend on a wide range of circumstances. Among them include the nature of the buyer’s business or personal status, the nature of the property being insured, and the nature of the buyer’s connection to the project.

It’s also worth noting that insurance companies for construction sometimes provide discounts when many policies are purchased together in bundles tailored to certain professions.

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6 Types of Construction Insurance

In this section, we will be discussing 6 major types of construction insurance – related to construction liability insurance, property damage, equipment insurance, building risk insurance, insurance policies for general contractors, insurance policies for bodily injury, insurance related to business property, etc.

1. General Liability Insurance

General Liability Insurance

Construction firms should get general liability insurance to guard against the wide variety of potential dangers they encounter. Potential dangers include:

  • Injury to a third party’s property
  • Injury to a third party’s body
  • Violations of copyright and other forms of advertising damage
  • Injuries brought on by your finished project’s installation or construction

Your business general liability coverage will pay for any necessary medical care and any damaged or lost property if one of these things happens on the job.

General liability insurance or construction liability insurance should be a cornerstone of your construction insurance package because of the much-increased risk of bodily harm and physical damage to property in the building industry compared to other businesses. Construction projects sometimes need this kind of insurance, and some customers may insist that you have it before they hire you.

Contractors’ pollution liability insurance should supplement general liability coverage. Contractors’ pollution liability coverage, a kind of environmental insurance, safeguards against incidents of pollution that may result in personal harm or property damage to a third party.

2. Professional Liability Insurance

Your construction company is safeguarded against legal action about the quality of your work or the work of any subcontractors that you may have employed if you have professional liability insurance, generally referred to as errors and omissions insurance (E&O).

When you are insured by professional liability insurance, you can have the benefits of lawyer fees, court fees, settlements, or any other lawsuit charges – No matter if you’re at fault or not.

3. Workers Compensation Insurance for Construction Industry

Workers Compensation Insurance for Construction Industry

Another type of construction business insurance is workers’ compensation insurance. To brief about such construction insurance solutions, let us take an example.

For example, you run a construction company, and one of your employees has an accident or sickness on the job. Now, if you have workers’ compensation insurance – it will pay off his medical bills, which will cover medical care and lost income.

Having workers’ comp insurance protects the business owner, the employee, and the company from financial loss. In addition, most workers’ comp plans also contain employer’s liability insurance, which may be used to defray the cost of employee lawsuits alleging that dangerous working conditions caused their injuries.

4. Commercial Auto Insurance

When another person is hurt in a car accident, the costs quickly add up. If one of your corporate cars were involved in an accident, the associated medical costs, legal fees, and property damage would be covered by the commercial auto insurance policy. Trucks and other vehicles utilized in the construction industry are included.

Commercial auto insurance for company-owned cars is mandatory in most states for construction companies and contractors, while the minimum amount of coverage needed varies by jurisdiction. Having insurance that covers at least the minimum required by your state and an amount that will cover actual costs in the event of an accident is ideal.

5. Builders Risk Insurance

The expenses of any damage done to a building or structure while it is still in the process of being constructed are covered by the builder’s risk insurance, which is sometimes referred to as the course of construction insurance.

Such damages can be done by fire, weather or vandalism. Even if other construction insurance plans protect workers and equipment, the majority of them do not cover structures that are not yet complete.

6. Inland Marine Insurance

Inland Marine Insurance

The construction business is only one of several that may benefit from inland marine insurance. The term “marine insurance” refers to a kind of insurance that was formerly associated largely with goods and boats that were transported overseas.

Now, a wide variety of goods—from those in transit to those in the custody of a repairman or storage facility to those that are routinely transported between various locations—are protected by inland marine insurance.

How Much Does Construction Insurance Cost to Construction Businesses?

Well, to be very honest, construction insurance costs mainly depend on a number of factors and stakeholders.

While no two policies are identical, you may still get a general idea of costs by researching several providers. The average price of various building insurance policies is as follows:

  • General liability: $70 per month
  • Workers’ comp: $275 per month
  • Commercial auto: $150 per month
  • Contractor’s tools and equipment: $15 per month
  • Professional liability: $85 per month

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Tips to Choose the Best Construction Insurance Coverage Companies

While you still search for an insurance company for construction or construction insurance companies – the price of building insurance plans will be determined by a number of different criteria.

Despite the fact that insurance for a construction company is marketed separately and differ in terms of what they cover, these policies are often impacted by the same set of characteristics, which are as follows:

  • Credit record of the company, as well as that of the policyholder and any listed insureds
  • The expertise of the businesses and contractors
  • The scale of the project or the company
  • The geographical location of the project, enterprise, or contractor
  • Limits on coverage and minimum out-of-pocket expenses


So, that is it when it comes to insurance for construction companies. We have not covered the surety bonds, payment bonds, bid bonds, construction bonds, what comes under property damage claims, lost wages, physical damage coverage at the job site, etc.

If you are one of those construction companies that doesn’t have any invoicing solution and scattered business operations – then Moon Invoice is the best choice as your next invoicing tool. You may use any of the construction invoice template forms to design customized invoices.