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Explainer: How Construction Liability Law Protects Your Business

Jul 25

Construction projects can be risky. In addition to the inherent dangers of working with abundant, sharp objects and heavy materials, construction-related activities come with their own risks. Construction sites are often out in remote areas; some may not have electricity or running water. Add to that the fact that many construction projects take place during the summer months when temperatures can soar, creating additional challenges for workers and project managers alike. All of these factors make construction sites attractive targets for theft. When someone breaks into a construction site and steals materials or equipment, they pose a threat not just to the people who work there but also to everyone else who uses those items outside. The construction industry accounts for about 10% of all property crimes in America each year (source: National Association of Builders). If you operate a building service company, trust us when we say you want to protect your company as much as possible against this type-A risk.

What Is Construction Liability Insurance?

Construction liability insurance protects your company against losses related to a construction-related property crime. According to Business Insurance, the average cost of property crimes in America is $1,981 per incident. If you have construction liability insurance and someone breaks into your business and steals materials or equipment, your company will not be held liable for any damages resulting from their actions. Construction liability insurance allows you to protect yourself against the risk of property crime. It provides you with the peace of mind that comes with knowing that if someone breaks into your business and steals materials or equipment during a construction project, you'll be covered for any financial losses incurred as a result of their actions.

Why Is Insurance Necessary?

Insurance is necessary to protect your business against potential thefts of materials and equipment, which is a common occurrence on construction sites. Additionally, insurance helps you recover the cost of damages that have occurred on your property. In some cases, insurance will cover all or part of the cost of replacing damaged items. Insurance also protects you in case one or more people working on your property are injured or killed because they were doing their job when they were hurt or killed.

Why Is It So Hard To Find Affordable Coverage?

Construction-related businesses must have liability insurance to protect themselves against the risks of construction site theft. The premiums for this type of coverage can be prohibitively expensive, often more than $20,000 a year on average. Despite the high costs associated with this type of insurance, it’s still necessary for many construction companies to obtain protection from these risks. Why is it so hard to find affordable coverage? It can be very difficult to find affordable liability insurance for businesses in general. In addition, construction-related business like those in the construction industry are often left without options when it comes to finding affordable coverage. For example, one solution is to create a risk pool that would allow multiple companies in the same field to pay each other's premiums; however, this has been shown not to be effective because when one company pays for another company’s premium, both companies actually end up paying more for their own policy (Source: National Association of Insurance Commissioners).

The Types Of Coverage You Need For Construction Sites

When you operate a construction company or work on any type of construction site, you need proper coverage. That's why we recommend a general contractor liability policy, which provides protection against property loss and damage during the course of your project. A typical general contractor liability policy will cover a broad range of risks, including workers' compensation claims and accidents, product liability claims, damages for faulty design or poor-quality materials, and more. A general contractor can also purchase more specific policies to cover different types of activities: -Bathroom remodeling -Building demolition -Carpentry -Demolition contractors -Electrical contractors -HVAC contractors If you're responsible for managing a construction site with multiple operators, it may be helpful to purchase an umbrella policy that covers everyone working on the site under one policy.

What Is The Limit Of Coverage You Should Buy?

If your company provides construction services and has a commercial building on the construction site, it is important to understand how the liability law you buy will limit your exposure. Construction Liability Insurance can protect your business from bodily injury and property damage claims for certain types of work performed on a construction site. This includes situations where someone might be hurt or an item gets damaged because of unsafe conduct. In addition, CIL covers a wide variety of additional risks including general liability, personal injury, advertising injury, and premises liability.

How Does A Policy Protect You From Liability?

It's important to know what the property and business owners are covered under, when a policy can and cannot be used, and how much money you'll need to spend on it. Construction liability insurance serves as a safety net for your company in case someone gets hurt or equipment is stolen from your site. You are also protected against lawsuits should someone slip on an unsecured ladder or if someone falls off-site during construction.


Construction liability insurance is one of the most important types of insurance you can buy to protect your business. It covers you from liability, protecting your business from lawsuits. To avoid unnecessary claims, consider buying a policy that covers up to $2 million in liability and be prepared by consulting with construction litigation attorneys