Owning a successful construction business is gratifying. But every successful venture comes with inherent risks. Employee accidents, natural disasters, fires and third-party injury claims are just a few. That’s why it’s so important to protect your assets with a comprehensive insurance plan.
But how do you know what kind of insurance you need? Here are a few things to think about before you buy.
What Are Your Biggest Risks?
All construction businesses have different insurance needs. A road crew on a highway project, for example, faces very different risks than welders working on a 22-story highrise. Further, your insurance needs today are probably very different than they were even a few years ago.
Here are a few questions to ask yourself as you consider your current insurance needs:
- What are the major risks my employees face on the job?
- What equipment would I need to replace if there was a major disaster, such as a fire or windstorm?
- How much is my business property worth today versus when I first took ownership?
- How vulnerable is my business to third-party lawsuits?
- Do I have enough liability insurance to cover court costs, attorneys fees, and settlement costs if I’m sued?
Once you have an idea of your risk profile, work with your insurer to structure a risk management program tailored to your insurance needs.
What Are Your Priorities?
Buying the cheapest coverage may seem like a good idea when you’re thinking about your bottom line. But the most inexpensive coverage isn’t always your best bet. For example, you can usually lower your premiums by choosing a high-deductible insurance plan. But will you be in a position to pay that deductible if your company suffers a substantial loss?
Some small construction businesses may decide to opt for the all-inclusive coverage offered by a Business Owner’s Policy or BOP. This option bundles general liability and business property insurance, usually at an affordable price. But BOP policies aren’t for everyone, especially companies who have a lot of heavy equipment or machinery that moves from place to place.
As a rule, it’s wise to base your priorities on worst-case scenarios. Ask yourself this. Is it worth saving a little money on annual premiums if I can’t rebuild my business in the event of a major loss? (Statistically, up to 80 percent of small businesses never fully recover from a major catastrophe).
Is Your Insurer a Good Fit?
If you’ve been with the same insurer for a number of years, it may be time to ask yourself if that company still meets your insurance needs as well as it did before. A broker who specializes in small business coverage may have been perfectly adequate when you were just starting out. But they’re not as likely to know the unique needs of your construction business as someone who works with construction professionals every day. What’s more, a broker with specialized construction experience can steer you away from coverage you don’t need and help you find the kind of coverage that’s right for you.
Have You Considered Cyber Security?
Most construction companies today do some business online. And many companies use the internet to connect across various aspects of project development. As a result, construction businesses often have access to a wealth of data, such as intellectual property, architectural drawings, and financial information, to name just a few. What’s more, many companies now use HR software to store sensitive employee information. This may include payroll data, social security numbers, and even bank accounts. And all of these areas are subject to a cyber attack.
If your construction business does any business online, think about whether cyber liability insurance is right for you. Cyber liability insurance typically covers data breaches of all kinds. These include privacy issues, data loss due to viruses and malware, internet-related intellectual property infringement and more. It may also cover lost sales if your business needs to shut down temporarily due to a data breach, and the cost of notifying your customers of what occurred. It will also cover your court costs and the amount of any settlements if customers sue you for damages later on.
At The Carmoon Group, we specialize in helping small and medium-sized construction businesses meet their insurance needs. With nearly two decades of experience providing high-quality insurance to construction professionals, we are confident that we offer the best coverage at the best price. Give us a call today to schedule your annual insurance review, or contact us online now. We’ll get back to you right away.