3 Construction Insurance Must-Haves

Whether you’re a subcontractor or a general contractor – whether you build small backyard sheds or giant commercial buildings – whether you’re a one-man remodeling business or a multi-million dollar construction company, there are three types of insurance you need to consider.  In other words, the size of your business and the size of the project make little difference.  If you want to protect your investment, your employees, and even your business, there are three types of commercial insurance to consider: Liability Insurance, Builders Risk Insurance, and Flood Insurance. 

Commercial Liability Insurance (A.k.a. Commercial General Business Liability Insurance)

Commercial Liability Insurance is a critical part of any business’s insurance portfolio and particularly pertinent in the construction industry where accidents and injuries are more common. Commercial Liability Insurance protects you and your company if someone gets hurt on your property or if you or an employee causes property damage or injury on a job site.  This insurance helps cover medical and legal defense costs and settlements if you are sued.  Extended litigation (including attorney fees and court costs) can quickly deplete your cash reserves - even if the claims are found to be unwarranted.  

The amount of liability insurance is proportionate to the cost of the project.  Generally, you should have coverage that is two to three times the amount of the construction project budget.  In addition, businesses with higher risk for damages, such as roofing contractors, may need higher coverage.

Before you begin to build, repair, or remodel any structure – even as a subcontractor - common business standards require that you provide evidence of liability insurance.  Adequate General Liability Insurance safeguards your business – even in today's litigious environment.

Builder’s Risk Insurance (A.k.a. Course of Construction Coverage)

Builder’s Risk Insurance (construction insurance) is property insurance that covers damage to a building during construction.  It may cover just the structure itself, or it can include materials, fixtures, and/or equipment being used in the construction or renovation of the building.  Lending and municipal authorities will often require this insurance, and it can apply to both new construction and remodeling projects.

Most Builder’s Risk Insurance policies cover damage caused by fire, wind, lightning, hail, theft, vandalism, and damages by aircraft and vehicles. Items that generally are not covered include damage due to earthquake, employee theft, water damage, and mechanical breakdown.  Damage resulting from faulty design, planning, workmanship, or materials is rarely covered, and it’s important to note that Builder’s Risk insurance doesn’t cover tools and equipment or the property of others (that’s why it’s important for sub-contractors to have their own insurance).

Flood Insurance

Flood insurance is typically covered by the National Flood Insurance Program and usually has a 30-day waiting period before entering its coverage period.  This is done so the insurance isn’t purchased only when a flood is expected. 

Flood insurance is required in high-risk areas and strongly recommended in moderate-to-low risk areas.  It normally covers damage caused by tidal waves, overflow of inland water, unusual accumulation of runoff water, and water exceeding normal levels. 

For more customized information about your construction insurance or contractor insurance needs, contact American Insuring Group at (800) 947-1270 or (610) 775-3848. We'll help get you the right coverage for your projects at the right price. That's because we're independent agents offering over 25 competing brands of insurance, so we're free to find you the best deal in quality insurance protection. Contact us today.

Worker's Compensation Insurance Costs

According to a recent U.S. Bureau of Labor report, Workers’ Compensation accounts for 2.8 percent of the total cost of a production, transportation, or material moving employee’s compensation and 3 percent for construction and maintenance employee’s compensation.  Businesses interested in reducing those percentages do what they can to improve workplace safety; thereby, reducing the number of workers’ compensation claims and providing a safer and healthier environment for employees.  It’s a win-win situation.

Like Games? Try OSHA’s New Tool to Help Identify Hazards within the Workplace

One of the first steps to creating a safer workplace is to identify potential hazards; if you don’t know a hazard exists, how can it be properly mitigated?  The Occupational Safety and Health Administration (OSHA) has created an interactive, online, game-based training tool to help small businesses effectively identify hazards within the workplace.  This tool, with both an owner and worker mode, is designed to help both company leaders and workers to not only identify hazards, but also learn how to abate and control those hazards. 

Currently, the user can choose between three different scenarios:

• OSHA Visual Inspection Training
• Manufacturing Facility
• Construction

OSHA Visual Inspection Training

The "OSHA Visual Inspection Training" scenario, which contains a saw, industrial chemical mixer, scaffolding and fall protection for inspection, shows users how to identify hazards on items found in the workplace; become familiar with typical hazard categories; and understand common relationships of hazards to equipment components and operations.  It offers the user an opportunity to practice a visual inspection and find hazards. In this scenario, the user can view equipment from 360° to look for hazards. The user can also talk to the employee and observe the employee at work to identify additional hazards.

Manufacturing Facility & Construction

The Manufacturing and Construction scenarios, which focus on the principal skills needed to effectively identify hazards in the workplace and reinforce the key components in the hazard identification process, allow participants to experience the entire workplace. The manufacturing scenario allows the user to be a part of the safety committee in a hovercraft parts manufacturing facility.  In the construction scenario, the user must identify and mitigate hazards to maintain a safe workplace throughout three phases of a construction project.

5 Key Components in the Hazard Identification Process

This tool helps owners and workers understand the five process components in identifying hazards:

1. Collect information: Review all information (manuals, safety data sheets, OSHA data, etc.) you may already have available to find hazards that have already been identified by others.
   
   
2. Inspect workplace: The most basic (yet important) component of inspection is the simple visual inspection. Inspecting the equipment and the surrounding work areas allows the user to look over the equipment without any obstructions that might exist while the equipment is being operated. Certain hazards might only be recognizable when the machine is not in operation.
   
   
3. Observe the operation: Another good way to identify hazards during an inspection is to observe the equipment in operation. Watch the operator and note any hazardous situations. Observing an operation gives the viewer an opportunity to see how the task is actually completed. This can provide insight on additional hazards that would not be recognizable otherwise (positioning of controls relative to the worker, noise and dust levels, by-passing or improper use of safety functions). This can only be done when workers are present and production is underway.
   
   
4. Involve employees: A great way to gain insight into workplace hazards is to talk to the equipment operators. Often, they are aware of issues that may not be apparent during an inspection. Talk to the workers and listen to their feedback.
   
   
5. Investigate incidents: Whenever an incident occurs, use that as an opportunity to learn about hazards that may have been overlooked.

To find out more about this new tool, check out https://www.osha.gov/hazfinder/. 

Lower Your Workers' Compensation Insurance Costs

Let American Insuring Group help you control your workers’ compensation premiums. We're an independent agency representing multiple competing brands of workers' comp insurance, so we can help you find quality insurance at a great price! 

Contact us at (800) 947-1270 or (610) 775-3848. Serving Philadelphia, Reading, Lancaster, Allentown, Harrisburg, Pittsburgh, Erie and beyond.

With the current sluggish economy, more and more companies are turning to business consultants to help cut spending, maximize productivity, and develop more cost-efficient practices.  Business consulting services come in a variety of shapes – from sales and marketing consulting to technology consulting – and sizes - from working out of a home office to working in a large consulting agency. 

Subjectivity, Risk and Professional Liability Insurance

If you’re one of the estimated 400,000 consultants in the US, it doesn’t matter what your specialty is, where you work, or your level of expertise - the advice you provide usually contains an element of subjectivity, which is open to allegations of negligent acts, errors, or omissions.  In the event of a lawsuit, legal fees and damages paid – whether a consultant is at fault or not – can quickly add up, so it’s important that you protect you and your business from potentially catastrophic litigation with Professional Liability Insurance (PLI), sometimes referred to as Professional Indemnity Insurance, which is a sub-category within Commercial Insurance. 

What is Professional Liability Insurance?

PLI is a type of commercial insurance that provides protection for Error and Omission exposure, sometimes referred to as errors and omissions insurance. It protects you from negligence claims arising from an alleged act or failure to act that caused harm to another party.  This type of claim is not covered by more general liability insurance policies. 

Why Isn't General Liability Insurance Enough?

General liability insurance policies only cover bodily injury, property damage, or personal injury. Some forms of insurance cover employers, public or product liability. Professional Liability insurance covers legal claims that cause harm that isn’t covered by these other general policies, such as negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice.

Professional Liability Insurance and Larger Consulting Contracts

If you decide to work with a larger corporation, PLI may be required to secure a contract. By acquiring this type of coverage in advance may be viewed as being prepared and better qualified to operate in the big leagues where the more lucrative consulting engagements are typically found.

Learn More About Professional Liability Insurance

For more information about professional liability insurance and other forms of commercial insurance, contact American Insuring Group at (800) 947-1270 or (610)775-3848.