Starting your own construction business is difficult but ultimately rewarding. The vast majority of construction companies qualify as small businesses or are family-run businesses. This means that the business owners themselves are typically in charge of all the administrative and operational processes, which can be a huge task for anyone no matter the amount of experience you have.
One of the easiest ways to guarantee your bases are covered is to familiarize yourself with the appropriate business insurance policies early on.
Here are some of the types of insurance you need to familiarize yourself with:
1. Course of Construction Insurance
This type of insurance is meant to cover a property during the course of construction. It is also known as a Builder’s Risk Insurance, and it covers renovation and repair works as well. Get an insightful insurance provider to talk you through the specific coverage details, the most important of which is the policy period. Course of Construction insurance is valid from the beginning of a construction period to the end, though you and your insurance provider should carefully evaluate the building construction policy provisions to properly determine what qualifies for the beginning and end period of the process. Furthermore, all parties involved with the construction project have to be named in the policy, including funders and subcontractors, so make sure your insurance provider has the right information to work with.
2. Property Insurance
This type of insurance can be used for specific assets or property that your business owns. As a construction business, on top of your actual office, you also manage other assets such as machinery and equipment like power drills, hoisting machines, cranes, and more. These should be insured with the appropriate policy specific to the type of equipment. It may be helpful to come up with an inventory list of all the equipment you have that you want to insure, and then present that to an insurance provider for consultation and feedback. Make sure you talk to your agent about policy specifics when it comes to the age of your equipment and types of damages that are covered.
3. Employment Practices Liability Insurance
Insurance policies that deal with worker termination or compensation are a must-have for any small business. The cost of dealing with employment-related allegations can be crippling for many small businesses, and it is wise to protect yourself against potential lawsuits. Your insurance agent should be familiar with the laws in your province regarding termination, breach of contract, and other employment and human resources practices. To further protect your business, adopt all the recommended human resources best practices and keep credible documentation of contracts, disputes, and negotiations with workers. Having good documentation can significantly bolster your insurance claims and cut down on time wasted dealing with allegations.
4. Auto Insurance
On top of a business vehicle insurance, construction companies should seek to get commercial auto insurance as well. Property insurance for your trucks and trailers is not enough. Separate auto insurance is mandatory in Canada, which additionally covers things such as third-party bodily injury, third-party property damage, and accidents. When it comes to auto insurances, deductibles can be a complex issue to wrap your head around. Speak to your insurance provider to learn how you can lower your auto insurance premium and manage risks when it comes to your fleet.
I set this blog up a couple of years ago now as a way to share my experience that I’ve gained through my school education and my real life education. It sounds geeky, but the economy is something that I’m really passionate about and it’s something that I am actually pretty talented in, so it’s great for me to share these experiences with those that may be struggling a little bit with finance and figuring out how to navigate the economy.