Construction Insurance Needs

The construction industry is a great place to be right now. As the economy recovers, the need for infrastructure and residential construction is growing, and the outlook for this year and beyond in the industry is optimistic.

However, this industry is a hazardous one. Employee injuries, property damage and liability lawsuits are high in the construction sector. Fortunately, a construction business insurance policy will help you protect your business against the inherent risks it faces. If your business falls under the NAICS construction sector umbrella, this is the type of policy you will need to look into.

What Is the NAICS?

The National American Industry Classification System (NAICS) was created to classify business establishments into various sectors for the purpose of collecting, analyzing and publishing economic data. Each industry subsector falls under a larger sector umbrella.

There are many different business types that are considered by the NAICS to fall within the construction sector. It is important to know how your business is categorized when you go to purchase a business insurance policy. For example, if you are a glass and glazing contractor or an electrician, you may not feel that your services are considered as construction. However, because these subsectors fall under the construction umbrella, they must be insured by construction business insurance.

What Subsectors Fall Under the Construction Sector?

The NAICS classifies 1.54 million U.S. businesses as construction companies. According to their classification system, the following business types are considered to fall within this industry:

• New building construction, including:
  • single, multifamily and for-sale housing construction
  • industrial building construction
  • commercial and institutional building construction
• Structural construction, including:
  • water and sewer line and related structures
  • oil and gas pipeline structures
  • electrical and wiring installation
  • power and communication line and related structures
  • poured concrete foundation
  • structural steel and precast concrete
• Highway, street and bridge construction
• Various contractors, including:
  • Plumbing, heating and air conditioning contractors
  • Framing contractors
  • Drywall and insulation contractors
  • Masonry contractors
  • Glass and glazing contractors
  • Roofing contractors
  • Siding contractors
  • Flooring contractors
  • Tile and Terrazzo contractors
  • Painting and wall-covering contractors
  • Carpentry Contractors
  • Specialty trade contractors
• Residential remodelers
• Land subdivision companies

Companies within the Construction Industry Have Unique Insurance Needs

In most cases, construction companies have administrative offices housed in a single, permanent location, while the work they do is done off-site and at various locations. This makes for some unique coverage needs that go beyond the general liability and property damage coverage that is part of all business insurance policies.

Most companies employ the use of company-owned vehicles to get to and from the job site and must frequently move and store expensive and heavy machinery. Construction insurance will offer a variety of coverage options that will enable you to insure your vehicles and your costly equipment. For example, you may want to consider:

• Commercial vehicle insurance: This will provide coverage for all company-owned vehicles from pick-up trucks to bulldozers.
• Inland marine insurance: This will provide coverage for your machinery and equipment while you are moving it to and from the job sites or keeping it in temporary storage while completing a job.
• Equipment breakdown insurance: If your machinery is not working properly, it can put a halt to your construction job and you risk missing deadlines. This coverage can assist you with the costs of maintenance and repair, and even provide you with temporary rental equipment while yours is being fixed.

Construction is a dangerous industry. In addition to the risk of employee injuries, large and heavy equipment, if handled wrongly, may result in property damage to your clients. Therefore, you may also want to consider:

• Workers compensation insurance:  Some states require this coverage. Whether or not it is required where your business is located, it is extremely important that you provide coverage against employee injuries.
• Owners and contractors protective liability insurance: This is designed to ensure that damage done on the job, whether by your workers or hired contractors, will be covered.

Construction insurance can be particularly complex. There are a number of different types of insurance coverage you may need to fully protect your construction industry business. When you work with an independent agent, you have the benefit of advice from an insurance professional and the convenience of having all your coverage needs handled under one roof.

Speak with a Local Independent Agent to Learn More

An independent insurance agent in the Trusted Choice network can help you assess your business coverage needs so you can best determine which insurance options are right for you. Because they are not tied to any one insurance company, they are able to put together a comprehensive package to meet all of your business needs. These agents are available to assist you throughout the entire process, from finding a competitively-priced and suitable policy, to making a purchase, or filing a claim. Contact an independent agent near you to get more information.