Owning a GC business can be incredibly rewarding. You get to build things, create lasting relationships, and enjoy the independence that comes with being your own boss.
But while the freedom and financial potential are enticing, the GCs we work with all say the same thing: the complexities of insurance can be a real headache without the right partner by your side.
For both newcomers and seasoned pros looking to brush up on the latest trends, this guide of ten insurance trends covers everything a GC needs to know to protect your business and avoid costly mistakes.
- General Liability Insurance
- What it Does: Protects against claims of bodily injury, property damage, and personal injury that happen on the job.
- Why You Need It: Lawsuits stemming from accidents or damage on a job site can negatively impact a business. General liability keeps you covered.
- Workers’ Compensation
- What it Does: Covers medical expenses and lost wages if an employee gets injured while working.
- Why You Need It: It’s required by law in most states, and it protects your business from lawsuits related to workplace injuries. Trying to cut corners by misclassifying workers or hiring uninsured subcontractors can seem tempting to save on premiums—but it’s a fast track to lawsuits, penalties, and financial disaster.
- Builder’s Risk Insurance
- What it Does: Covers damage to a building during construction due to risks like fire, vandalism, or storms.
- Why You Need It: Construction sites are vulnerable. Location, weather, and construction complexity can lead to higher risk exposure. Even delays or changes in project scope can lead to unexpected losses. Without builder’s risk insurance, you could be stuck paying for materials, labor, and out-of-pocket delays if something goes wrong.
- Professional Liability Insurance (Errors & Omissions)
- What it Does: Covers claims of negligence, errors, or omissions in the design or construction process.
- Why You Need It: Construction defects, delays, or contractual disputes can result in costly lawsuits. Professional liability insurance shields you from those risks.
*Bonus Insight: Construction defect claims are one of the top reasons GCs go bankrupt. Without proper coverage, legal and repair costs can be overwhelming.
- Commercial Auto Insurance
- What it Does: Covers vehicles used for business, like trucks or vans.
- Why You Need It: Your vehicles transport the lifeblood of your business—materials and tools. Commercial auto insurance ensures you’re not left stranded if they’re damaged in an accident.
- Umbrella Insurance
- What it Does: Provides additional liability coverage when your other policies reach their limits.
- Why You Need It: In the event of a catastrophic claim that maxes out your regular insurance, umbrella insurance offers extra protection. Without it, out-of-pocket costs could spell financial ruin.
- Subcontractor Insurance
- What it Does: Ensures subcontractors have their own insurance (liability and workers’ compensation).
- Why You Need It: If a subcontractor causes a problem—whether an accident or property damage—you don’t want to be the one stuck paying the bill. Verifying their insurance protects you from unexpected losses.
- Contractual Requirements
- What it Does: Keeps you compliant with insurance obligations outlined in your contracts.
- Why You Need It: Clients and project owners often demand specific types of insurance. Failing to meet those requirements can lead to lawsuits or delayed payments, threatening your cash flow and potentially your business.
- Certificates of Insurance (COIs)
- What it Does: Provides proof of insurance for you and your subcontractors.
- Why You Need It: A valid COI confirms that everyone on the project has the necessary coverage in place. Without it, you’re taking unnecessary risks.
- Claims Process and Risk Management
- Why It’s Important: Knowing how to file claims and mitigate risks can save you time, money, and a whole lot of headaches.
- Why You Need It: Effective risk management and a smooth claims process lower your insurance costs, keep projects on schedule, and protect your reputation.
The Fine Print Can Make or Break You
Many insurance policies have exclusions, blinding even the most experienced GCs. For example, some policies won’t cover certain construction defects or hazardous materials (like asbestos). If you’re hit with a claim that falls into one of these categories, you’re left footing the bill—often leading to bankruptcy.
The Bottom Line: The number one insurance-related issue that sinks GCs is facing claims that exceed their coverage. Whether it’s due to inadequate coverage, policy exclusions, or subcontractor liabilities, managing your insurance and avoiding these issues is the key to maintaining a successful business.
Need Help with Your Premiums?
If insurance costs are cutting into your margins, we can help. Don’t try and navigate renewals and updates on your own. We’ll work with you to find a comprehensive solution that covers all your bases—without putting your business at risk.
Schedule a no-obligation assessment today so we can learn about your needs and apply our expertise.