Generally, builders work in risky environments that open up the possibilities of injuries, potential litigation, and third-party damages. Whether you are self-employed or working in a team, you’ll need to be protected by comprehensive insurance. Builders insurance will shield you against liabilities associated with your work. Even if the property owner is insured, it’s essential to have coverage of your own. There are six main types of insurance for builders that you should consider, which include the following:

Public Liability Insurance

Of course, you expect members of the public to be walking or working around your construction site. They may encounter accidents at the site due to open potholes or even falling objects. This is where public liability insurance comes in. It will cover the medical bills and litigation costs incurred if you are found liable. In addition, general liability insurance protects you from potential damages on properties neighboring your site. In simple terms, this insurance covers you against third-party liability.

Tools Insurance

It is also known as equipment coverage or inland marine insurance. As the name suggests, it covers tools and equipment. Most times, you are working on a remote site away from your business premises. As such, you’ll need to carry your tools and equipment. This can be a mere toolbox or even large earth-moving machines. As expected, machines can breakdown, and your tools can get lost or stolen.

Now, tool insurance covers such losses and damages. You will not incur the cost of replacement or repair from your pocket. However, be sure to keep an accurate inventory of all your tools and equipment and keep the record updated with your insurance carrier.

Professional Liability Insurance

Professional liability is one of the most overlooked coverage by most construction workers. It is also called professional indemnity insurance. Professional liability insurance covers for mistakes or errors you unintentionally make in your line of work. Mistakes are inevitable, and anyone can be a culprit.

Common mistakes in a construction site include copyright infringement, oversights, negligence to provide quality services, failure to deliver services, poor advice, and faulty design. In some cases, the client can incur financial losses due to such mistakes. Professional liability insurance covers these financial liabilities.

Workers’ Compensation Insurance

Construction work brings a high risk of bodily injury, more so to builders. When working on a construction site, you can get injured by falling objects, building collapses, fire, electricity, equipment accidents, falls, and harmful chemicals. Some of these injuries can be severe, requiring intensive medical interventions such as hospitalization, amputations, or surgery. In such situations, the medical bills can go overboard.

If you keep on encountering injuries while at work, the cost of settling medical bills can be too much to bear. That is why you need worker’s compensation insurance. The coverage pays for medical expenses and sometimes the partial wages you have lost during the recuperation period. This coverage is compulsory for all construction workers.

Builder’s Risk Insurance

This coverage is sometimes called the course of construction insurance. It protects a building under construction from damages resulting from natural calamities, vandalism, theft, explosions, aircraft or vehicle collision, and fire. Other issues that may be covered under extended coverage include contractual penalties, mechanical breakdown, poor designs, employee theft, and war. The builder’s risk insurance covers the losses and damages of equipment, supplies, and materials damaged at the construction site due to such eventualities.

Business Vehicle Insurance

This coverage is also called commercial auto insurance. It covers you against financial costs incurred during an automobile accident. If you get found at fault in a car crash, the insurance will cater for costs and bodily injuries and damages you and the other parties have incurred. It also protects your commercial vehicle against fire, theft, and other perils. You will need the business vehicle insurance if you own or have leased a car for business purposes. You will only be eligible for coverage if the vehicle is used to transport building materials, tools, and workers in and out of the site.

As a reputable and professional builder, you should have most, if not all, above-listed insurance coverage. Be sure to partner with a reliable insurance agent to protect you and your business from liability.


Eric Reyes is a passionate thought leader having been featured in 50 distinguished online and offline platforms. His passion and knowledge in Finance and Business made him a sought after contributor providing valuable insights to his readers. You can find him reading a book and discussing current events in his spare time.