Paul Sanchez
Construction projects are associated with a wide range of risks, from accidental damage to the property to third-party claims for injury or property damage. Auto insurance construction is a type of insurance policy that provides coverage for these risks. It is designed to protect property owners, developers, and contractors during the various phases of a construction project. There are several types of auto insurance construction policies available, including general liability insurance, commercial auto insurance, and contractors' all-risks (CAR) insurance. These policies can cover risks such as property damage, third-party injury claims, theft, fire, and vandalism.
| Characteristics | Values |
|---|---|
| Type of Insurance | Non-standard insurance policy |
| Who is it for? | Construction sector workers, including contractors, subcontractors, suppliers, and design professionals |
| What does it cover? | Property damage, third-party injury, damage claims, theft, weather damage, fire damage, repairs to unfinished work, vandalism, temporary buildings, show home contents, architects' drawings, property awaiting sale, etc. |
| What does it not cover? | War, earthquakes, pollution, infestation, nuclear hazards, wear and tear, market loss, government seizure |
| How is it provided? | Usually on an annual basis |
| Who takes it out? | Contractors and employers (jointly) |
| Who can file a claim? | All parties in the policy |
| Who must be informed of injuries and damages? | The insurer |
What You'll Learn
Commercial auto insurance
The cost of commercial auto insurance can vary depending on several factors, such as the type of business, the number of covered vehicles, driving records, business revenue, and the chosen coverage limits and deductibles. It is worth noting that commercial auto insurance is required by law, and state regulations determine the minimum coverage needed to meet liability insurance requirements.
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General liability insurance
- Bodily injury: When a customer or other third party experiences an injury related to your work (e.g. tripping over wiring), they could sue, and general liability insurance would cover court fees and potential settlements up to your coverage limits.
- Property damage: If, while performing work, you cause unintentional damage to a customer's property (e.g. furniture, drywall, or flooring), general liability insurance would help recoup the cost of damages.
- Personal and advertising injury, including libel or slander: If you unintentionally harm another business through advertising, libel, or slander, a general liability policy can help pay damages to the other business.
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Builders risk insurance
A builders risk insurance policy can cover a range of projects, from new construction to remodelling and installation. It can protect against damage from weather, vandalism, fire, theft, and natural disasters. It can also cover equipment breakdown and the cost of fixing or replacing damaged equipment. In addition, it can provide liability protection against claims of bodily injury suffered by non-employees on the construction site.
The cost of builders risk insurance typically depends on the size and scope of the construction project, as well as the location and the quality of materials used. It usually ranges from 1% to 5% of the total construction project budget.
When choosing a builders risk insurance policy, it is important to work with an experienced agent or broker who understands the unique risks involved in construction projects. It is also crucial to review the policy carefully to understand what is covered and what exclusions may apply.
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Contractors' All-Risks (CAR) Insurance
Construction projects are associated with a myriad of financial risks, including property damage and third-party injuries. To mitigate these risks, construction companies often purchase insurance policies. One such policy is Contractors All-Risks (CAR) Insurance.
CAR insurance is a non-standard insurance policy that provides coverage for property damage and third-party injury or damage claims, the two primary types of risks on construction projects. It is specifically aimed at those who work in the construction sector and is usually provided on an annual basis. The policy covers damage to property, including improper construction of structures, damage that occurs during renovation, and damage to temporary work erected on-site. It also covers third-party injuries, including subcontractors who may be injured while working at the construction site.
The goal of a CAR insurance policy is to ensure that all parties on a project are covered, regardless of the type of damage to the property or who caused it. Typically, both the contractor and the employer jointly take out CAR insurance policies, and other parties such as financing companies can be named to the policy. All parties have the right to file a claim against the insurer and have a duty to inform the insurer of any injuries and damages that may result in a claim.
Insurers who underwrite CAR policies lose the right to subrogation, meaning that if an insurance company pays out funds to one party in the contract, they cannot seek to recover those funds from another party in the contract. CAR policies typically cover risks such as floods, wind, earthquakes, water damage, mould, construction faults, and negligence, but they usually exclude normal wear and tear, willful negligence, or poor workmanship.
CAR coverage can be extended to include manufacturers, suppliers, contractors, and subcontractors, as well as events such as additional custom duty, damage to surrounding property, and loss due to breakage of glass. It can also be designed to include losses incurred due to delayed project startup caused by an insured loss. Additionally, CAR policies can be expanded to include provisions for escalation, acts of terrorism, and excess third-party liability.
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Workers' compensation insurance
In the case of self-employed or sole proprietor businesses, workers' compensation insurance may not be required by state law. However, it is still beneficial to have this coverage as personal health insurance may not cover medical costs associated with work-related injuries or illnesses.
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Frequently asked questions
Auto insurance construction is a type of insurance that covers vehicles used by businesses, including those in the construction industry. It covers legal bills, medical expenses, and property damage in the event of an accident.
Auto insurance construction covers vehicles owned by a construction or contracting business. It can help with legal fees, medical payments, and repairs to construction vehicles in the event of a collision. It also covers non-collision damages such as theft, vandalism, and fire.
Any company-owned vehicles must be covered by commercial auto insurance. If your business uses vehicles to commute to head offices or job sites, or if your employees use their own cars for business purposes, you will need auto insurance construction.
