Condo Construction Insurance

Condo construction companies are part of the larger general contractor industry. This industry comprises establishments primarily responsible for constructing new single-family housing, including certain types of condominiums. Condo construction companies take on a great deal of risk for their businesses when constructing new condos for their customers.

Unfortunately, incidents do occur on the job, as they do in any type of construction. The best thing you can do to protect your business and your customers is to have the right business insurance in place to help you recoup from possible losses. A local independent insurance agent can help you secure a policy fast. But first, here's a closer look at condo construction insurance.

Why Condo Construction Insurance Is Necessary

Condo construction insurance is a commercial insurance package comprising several types of coverage necessary for carrying out condo construction jobs. Coverage is critical because condo construction contractors take on huge risks at job sites. Incidents can occur while working with other contractors and subcontractors, using and storing valuable tools, equipment, and building materials on-site, and when moving them from place to place.

On any given day, a condo construction business might experience any of these incidents or losses:

Property theft, vandalism, loss, or damage at a home office or on a job site
Lost income due to work stoppages after a fire, storm, or power outage
Employee illness, injury, or death
Liability claims if they cause bodily injury or personal property damage to others at a home office, showroom, or on a job site

Aside from these immediate risks, condo construction contractors can be held legally responsible for problems that happen long after a condominium unit or complex is complete. Leaky plumbing, mold problems, structural defects, and faulty drywall or stucco are all common problems that may only become apparent months or years after a building is completed.

What’s worse, if one condo has a problem, it’s likely that others built with the same materials or by the same contractors have the same problem. Your condo construction insurance gives you a place to turn when repairs have to be made and, in the worst case, when lawsuits are filed. Not to mention, it's often required for you to show proof of insurance before you can even begin work on a job.

What Kind of Insurance Do Condo Construction Contractors Need?

General liability insurance is one aspect of business insurance and your first line of defense for lawsuits and claims that you have caused property damage or bodily injury. For those in the construction field, including those who specifically work on constructing condos, a specific type of liability insurance is necessary:

Contractor liability insurance: This protects you if your business is responsible for bodily injury or personal property damage to others. Most condo construction firms require applicants to carry general liability insurance to obtain a contractor's license.

Contractor liability insurance provides coverage for a variety of liability claims, such as:

Bodily injury
Personal property damage
Completed products
Faulty workmanship
Personal injury and advertising injury

An independent insurance agent can help you or your contracting firm get set up with the proper contractor liability insurance.

What Other Types of Insurance Do Condo Construction Companies or Contractors Need?

There are several additional kinds of business insurance that condo construction companies and workers need beyond contractor liability coverage. These include:

Commercial auto insurance: If you own trucks or other company vehicles, you'll need this coverage. Commercial auto insurance provides coverage for property damage and bodily injury liability claims, vehicle damage, and medical bills, as well as any costs related to lawsuits due to auto accidents involving your vehicles.
Professional liability insurance: Also known as contractor errors and omissions insurance, this covers you if a client experiences a loss based on any professional services you provided, such as faulty design work or advice that leads to a loss in some way.
Commercial umbrella insurance: This provides an extra layer of liability protection to other policies you might have. This coverage kicks in when the limits of your other policies have been exhausted, protecting you if a claim exceeds the amount of coverage available from another policy, like commercial auto insurance. You can typically buy excess liability coverage in increments of $1 million.
Commercial property insurance: This covers your office space, warehouse, or other buildings and their contents for losses due to fire, theft, vandalism, weather events, and more.
Business interruption insurance: Property insurance also typically includes loss of income coverage or business interruption insurance. It reimburses you for lost income and helps pay for certain ongoing expenses if you are temporarily unable to operate due to a covered loss (e.g., a fire, storm, etc.).
Inland marine insurance: This is another form of property insurance that protects your equipment, tools, portable computer equipment, and building supplies against theft, loss, or damage while they're in transit to and from work sites.

An independent insurance agent can help you assemble a comprehensive business insurance policy that includes every type of coverage you need to complete condo construction jobs.

Why Contractors Need Builders Risk Insurance

As a condo construction contractor, you face unique risks. You might have numerous condos or condo complexes under construction at one time, in varying states of completion. Some may be only a foundation or a frame, while others may be ready for the final interior finishing touches.

At each job site, you have tools, equipment, building materials, and the structure itself to worry about. Various incidents could not only lead to a loss of materials or tools needed for the job, but a delay in the project.

What happens if there’s a fire or storm that destroys the structure? What if thieves break into your construction trailer and steal valuable tools, equipment, or materials? How would you pay for the losses and complete the house?

Fortunately, builders risk insurance is designed to cover these incidents and more. Here's a quick breakdown of this crucial coverage:

Builders risk coverage is a type of property insurance that helps construction professionals protect their investment and their bottom line.
Builders risk insurance protects buildings that are under construction, as well as materials and equipment at the job site.
Builders risk insurance usually covers the total completed value of the structure, including materials and labor, but not the value of the land.
Builders risk insurance typically covers damage due to fire, wind, theft, lightning, hail, explosion, vandalism, and certain other perils.
Builders risk insurance doesn't cover worker accidents and injuries or liability risks. These are covered by your other policies like workers compensation, which is required if you have employees and depending on your state's laws.

You can structure a policy to cover your unique projects and related exposures. Note that your builders risk insurance policy won't cover property on the job site that belongs to others, and subcontractors are usually required to have their own insurance.

Why Do You Need Workers’ Compensation Insurance?

Any kind of construction environment can be dangerous for employees. No matter how many safety protocols you have in place, accidents happen. Construction workers may use heat and welding tools, saws, hammers, heavy machinery, and sharp instruments. Workers can also fall from unfinished second stories, off of roofs, or while framing a condo.

Even employees who work with simple hand tools can be vulnerable to repetitive motion injuries and other problems. What’s more, insulation, lacquers, paints, and other chemicals can cause eye and lung irritation or worse.

Keeping your employees safe from work-related injuries is important for their health and satisfaction, as well as your long-term financial survival. Workers’ comp. provides coverage for employees when accidents happen at the workplace, regardless of who's at fault, unless the employee was behaving negligently or was under the influence. The injured worker receives compensation for required medical care and income protection after a work-related injury or illness.

Each state has different workers’ compensation laws. Your independent insurance agent can help you navigate the rules for your state and can help you find appropriate workers’ compensation insurance for your contracting firm.

How Much Does Condo Construction Insurance Cost?

Insurance costs for condo construction contractors vary significantly due to many different factors. Further, your costs may increase or decrease over time as the number of condos under construction fluctuates.

Certain factors that can influence the cost of condo construction insurance include the location and types of condos you're building, the number of condos under construction, and the coverage types and policies you need. The number of years your business has been in operation, and its claims history also impact your policy's premium rate. A local independent insurance agent can help you find the most affordable policy and any discounts you qualify for.

The Benefits of Working with an Independent Insurance Agent

Independent insurance agents shop and compare condo construction insurance policies from multiple carriers that offer coverage in your area. They'll help you find the best overall blend of coverage and cost. And down the road, your agent will be there to help file claims for you or update your coverage as necessary.

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