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Planning To Start A Construction Business? Do Consider These Insurance Policies For A Safe Future!

A construction business involves heavy machinery, a colossal workforce and bustling activities. This increases company owners’ liabilities towards their workers, equipment, clients, etc. Keeping this in mind, IRDAI approved certain insurance policies that provide financial coverage to construction company owners against unforeseen incidents. This article discusses some of the top insurance policies a construction business must purchase for a safe future.

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6 Insurance Policies That Can Safeguard Your Construction Business

Considering the risks associated with construction activities, company owners should purchase insurance policies to avoid bearing substantial financial liabilities. Here are some of the must-have commercial insurance policies for a construction business:

Comprehensive general liability insurance

With this policy, construction companies can insure themselves against property damages or bodily harm incurred during the business period. In addition, it provides financial coverage to the company against damages caused to a third party due to the policyholder’s business.

For instance, a customer visits the insured construction company and gets injured by construction machinery or product. In such a scenario, the company is liable for the damages caused to that client. Here, general liability insurance will cover the expenses for his treatment.

Professional liability insurance

Professional liability is a must-have insurance for business owners to protect their business and other professionals providing any service to the company. One can claim this insurance against unintentional breach or negligence of a contract, infringement of intellectual property, etc. Lawyers, doctors, accountants, architects, construction companies, etc., can purchase this insurance to protect themselves from the financial liabilities claimed by their clients.

For instance, let’s say a construction company committed to finishing a project within a specific date. If it takes more than the decided time, clients can file a suit considering the delays. Professional liability insurance can help the company stay protected from financial losses.

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Commercial vehicle insurance

Every business organisation must insure their commercial vehicles against accidental damages and life losses. Commercial vehicle insurance covers damages caused to the insured vehicle due to accidents, natural calamities, fires, collisions, etc. In addition, companies can purchase a third-party liability-only policy as well to get financial coverage for third-party liabilities. However, this policy will not cover the owner or his vehicle.

Choosing a standard policy will cover insurance holders and their vehicles against unforeseen mishaps. Besides, it offers several add-on coverage and endorsements to extend the coverage for maximum benefits. This policy covers both goods and passenger-carrying commercial vehicles.

Contractors’ all-risk insurance

This is an all-risk insurance policy with specific exclusions to cover property damages and third-party liabilities such as bodily injuries. Considering the high accidental risks involved in construction industries, insurance companies offer this comprehensive policy to contractors.

However, this policy only covers the damages caused due to workplace accidents. Policyholders can also avail of add-ons by paying additional charges to maximise their benefits.

Contractors’ plant and machinery insurance

This is another essential insurance policy for construction plants that covers the damages caused to their machinery. Drilling machines, dumpers, rollers, excavators, etc. machinery are crucial for construction. Besides, a company needs to invest a substantial amount while buying these machineries.

So, they can insure such expensive and necessary equipment against damages caused due to construction works. However, this policy will not cover any damages caused due to negligence, mechanical breakdown, an explosion of pressure vessels, etc.

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Workmen’s compensation

This policy is also called worker’s compensation or employee’s compensation. Workmen compensation insurance provides coverage against the employees’ bodily injuries, disability, occupational diseases, death, etc., due to their job. An organisation with lots of labours or professionals can purchase this policy to compensate the employees.

However, this policy will only cover the injuries or losses caused while working in the insured firm. Besides, this insurance will not cover work injuries caused by alcoholic influence.


Several risks are associated with construction companies. Hence, owners should opt for suitable insurance policies to safeguard themselves and others from sudden mishaps. Besides, the workforce forms a crucial part of any industry. So, company owners should purchase workers’ compensation policies to cover them against losses and damages caused while performing the company’s job.

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Written by Marcus Richards

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