Types of Construction Insurance: What Are Your Options?

The construction industry can pose many risks for danger and injuries as the jobs often involve heavy machinery, equipment, and challenging tasks. That is why we suggest reliable insurance for utility contractors in New York and can help construction company owners make sense of it all. 

What Is Construction Insurance?

Construction insurance helps property owners, contractors, and construction companies avoid liabilities, lawsuits, and other issues by offering them protection. Contractors or construction businesses may need multiple policies to protect their companies and projects. 

What Types of Construction Insurance Are There?

Multiple types of construction insurance are available, and you should consider each before making a decision. Finding a good insurance company with reasonable rates is essential.

1. Builder’s Risk Insurance

Builder’s risk insurance covers the costs of any damages caused to a building or property while construction is in progress. It can include vandalism, fire, or severe weather damage; it is a critical type of insurance as others will not cover this. A risk insurance policy protects people and equipment and ensures a business will not need to repurchase tools, equipment, and materials.

2. Commercial Auto Insurance

Commercial auto insurance protects you when a company vehicle is in an accident, covering property damage, legal fees, and medical costs. Your policy should cover state requirements.

3. Contractor’s Tools and Equipment Insurance

Contractors use tools that can be expensive and extremely valuable, which is why insurance for them is vital. People can steal or damage this equipment, or it could become lost, meaning your business is out a lot of money and necessary tools. The contractor’s tools and equipment insurance help pay for replacements.

This insurance can help cover:

  • Hand Tools (hammers, saws, wrenches, or screwdrivers)
  • Power Tools (circular saws, nail guns, or drills)

4. General Liability Insurance

General liability insurance protects businesses against common construction risks and situations, with the policy covering property replacements, repairs, and medical costs for the injured parties. Problems that can occur resulting in the need for this insurance can include:


  • Advertising or copyright infringement
  • Bodily injury (third party)
  • Damages caused by the completed project
  • Damages caused by installation
  • Property damage (third party)

These risks are some of the highest, so having general liability insurance alongside others is critical to protect your company.

5. Professional Liability Insurance

This insurance helps you avoid lawsuits regarding the quality of work you or your subcontractors performed. These lawsuits occur if you do not complete the quality of work you agreed to within the timeframe. Professional liability also helps with legal costs.

6. Workers Compensation Insurance

Workers’ compensation insurance supports employees when they experience a job-related injury, covering lost wages and medical bills. Many states require companies to offer these as protection for those in the construction industry, preventing them from being responsible for paying. Workers’ compensation is efficient because it protects construction company owners, the company itself, and the employees that work there.

Cost of Construction Insurance

Each insurance company will vary in the costs of these coverage types, but there are factors to consider. For example, the size, experience, or location of a business, deductibles, and coverage limits can all play into the cost of construction insurance. The company or policy holder’s credit history may also factor in, along with the project size.

The types of construction insurance listed previously are critical considerations.

Requirements for Construction Insurance

Not only does construction insurance protect people and items, some states legally require businesses have these policies in place. For instance, commercial auto insurance is a state requirement, as is workers’ compensation in most of them. Such laws can vary depending on the size of the business and the number of employees.

Large-scale projects for organizations may require a construction company to have specific insurance before beginning the project. If you aren’t sure which types of insurance you need, the experts at TCE are happy to help.

Receive Help from Transportation Construction Environmental Insurance Services Inc.

TCE Insurance Services Inc. is an independent insurance agency able to simplify the types of construction insurance. We can help you protect your construction company with our extensive industry knowledge.

We also hope you check out our construction safety tips to keep in mind during winter as we operate out of New York, in Staten Island, and Hauppauge. Contact us today for a quote or to discuss options for your construction business by calling 631-352-5700 (Hauppauge) or 718-370-3131 (Staten Island). You can also fill out our quick and easy online form, and we will respond as soon as possible.