Types of Construction Insurance

Employers' Liability

Workers compensation insurance is designed to provide the statutory benefits required by state law to an employee who is hurt or killed as a result of employment (cf. Health and Safety). Employers liability insurance is usually written in combination with workers compensation insurance and provides broad coverage for work-related injury or death of an employee which is outside the scope of the workers compensation policy. Separate limits of $1/2 million are commonly required. THIRD PARTY Comprehensive general liability insurance generally insures against liability imposed by law for negligent acts occurring in the conduct of the business which result in bodily injury or damage to the property of others. Typically, the basic policy can be endorsed to include coverage for owners and contractors protective insurance, products and completed operations, blanket contractual, personal injury (libel, slander, etc.) and will frequently include coverage for liability arising from the insured's automobiles.

CONTRACTUAL LIABILITY

Contractual liability insurance protects the contractor when he assumes the legal liability of others, generally the owner, designer or other designated party. Most contracts will contain some form of indemnification clause or hold-harmless provision in which the contractor is required to assume the potential liabilities of others.

PROFESSIONAL LIABILITY

Professional liability coverage is designed to provide protection to architects and engineers from liability based uponprofessional errors or omissions in performing design, construction management or other services. BUILDER'S RISK

Builder's risk insurance covers the cost of damage of a physical nature to a building or other component of a construction project. Coverage applies to material and equipment not yet incorporated into the work when located on site or in transit to the site. Current policies generally include the interests of the owner, the general contractor and all subcontractor and material suppliers. The more common form is all risk which provides protection from all perils except those specifically excluded. Most common exclusions include war, nuclear, faulty design, faulty materials, faulty workmanship, earthquake and flood. EQUIPMENT FLOATER

The equipment floater provides coverage for damage to mobile and stationary construction equipment which is not generally subject to vehicle registration. It usually provides coverage for damage to the equipment whether located at the job site, in transit, or at the contractors yard. Premiums are normally computed periodically based upon the value of the equipment for the contractor-owned items and based upon the rental rate for rented equipment.

WRAP-UP

Basic wrap-up insurance policies can include comprehensive general liability insurance, excess general liability, builder's risk, workers compensation, and occasionally errors and omissions insurance. Automobile liability insurance, equipment floaters and the deductible or self-insured retention normally continue to be the responsibility of the individual insured. The wrap-up insurance program is established in particular private projects and some public projects including rapid transit, wastewater and other programs have utilized wrap-up insurance where state law does not prohibit their use.