Industry Guides

A Guide to Insurance for Construction Contractors

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Key Points
  • Essential Coverage: Construction contractors should secure general liability insurance to protect against third-party bodily injury or property damage claims, workers’ compensation insurance for employee injuries, and property insurance for damage to buildings, equipment, and supplies.
  • Additional Policies: Consider builder’s risk insurance for coverage during construction, professional liability insurance for design errors, and surety bonds to safeguard against non-performance claims.
  • Tailored Solutions: Insurance needs vary based on business size, type, and risk level; consulting with an independent agent like Lewis Mohr can help determine the appropriate coverage.

Construction contractors face many risks every day like property damage, bodily injury, and even death. This is why it’s important to have the correct insurance in place in case an incident occurs. The most common insurance policies that construction contractors need to have include general liability insurance, workers’ compensation insurance, and property insurance.

Which Insurance Policies to Consider?

With general liability insurance, you protect your company from claims of bodily injury or property damage caused by negligence. While workers’ compensation insurance will protect your workers against bodily injury or death and loss wages caused by accidents on the job. Lastly, property insurance protects construction contractors from claims of damage to their property, including buildings, equipment, and supplies.

It’s important to note that machinery and equipment that is transported from job to job are not covered under standard property insurance policies. These items are covered under contracts called “floaters.” Additionally, a builder’s risk insurance policy will help cover the ever-increasing value of a building or home you are working on. This is typically purchased by the owner of the building, but it’s important to evaluate it on a per-job basis.

These insurance policies may be the most important ones to consider, but they may not include everything you need coverage for. A couple of additional policies to consider are professional liability insurance and surety bonds. Professional liability insurance protects against claims of professional negligence, such as an error in design or construction. Bonds protects contractors and owners from “non-performance” claims, such as failing to complete a contract.

The amount of insurance coverage you need as a construction contractor will vary, but factors you should consider are:

Benefits of Coverage

Insurance is a significant expense for many companies, including construction contractors, but it is necessary. Here are some benefits of having insurance as a construction contractor:

If you are a construction contractor, it is important to have the right insurance policies in place. When you work with an independent insurance agent, you can determine the right amount of coverage for your unique needs. Contact us today for a detailed business analysis and insurance quote!

Erica Terito Headshot

Erica Terito, CISR

Erica Terito is a Commercial Lines Account Manager at Lewis Mohr Insurance Agency, where she has supported small business clients since 2004. A Certified Insurance Service Representative (CISR), Erica is committed to staying current through continuing education and industry seminars. With over 20 years of hands-on experience and a deep understanding of commercial risk, Erica helps local businesses protect what matters most with dependable, tailored coverage.
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