Types of insurance in construction industry
Construction Insurance is vital for each and every construction project. It is important to protect yourself and your clients. In most countries, this insurance is mandatory for construction projects. Construction Insurance provides coverage for material, risks, natural disasters, and employees. As mentioned earlier, construction insurance isn’t optional. Hence, it is very important that you are aware of the different types of insurance in construction industry.
A construction All Risk insurance offers comprehensive coverage to various risks that may arise during a construction project. It includes physical damage or loss that may happen to property, plant, or machinery. It also gives coverage against losses or damages caused by fire at the construction site. It is a comprehensive policy that covers various projects including water tanks, buildings, flyovers, airports, sewage treatment plants, etc.
Erection All Risk is another important type of Construction Insurance. It offers coverage against the losses due to the damage of erection and installation of machinery and also plant and steel structures. It also includes liability for third-party bodily injury or property damage from operations. It offers coverage to various types of projects like power plants, manufacturing and fabrication facilities, water and wastewater treatment facilities, and telecommunications centers.
Advanced Loss of Profit Insurance offers coverage for the financial losses arising due to delays in construction projects. It provides a payout if the company is facing significant loss incase the project takes more time to complete than what is planned. It is particularly crucial for companies that use debt financing, as they may face difficulties in repaying the cost incurred for purchasing or renting construction equipment.
Damages to expensive machinery can be extremely costly to most construction companies as machines are one of the most significant investments. Contractor’s Plant and Machinery Insurance can provide coverage to such unprecedented losses. This type of construction insurance covers the cost to repair/replace the damaged machinery when it is at work or rest, while at a third party site or even when dismantled or reassembled for maintenance.