Real estate development comes with numerous risks, and insurance is one of the many ways to manage it. That explains why there can never be a global approach to construction property coverage.
Take a look at these commonly confused policies and their definitions.
Commercial General Liability Policy
A CGL policy is the closest you can get to wholesome insurance as it covers bodily injuries and property damage as well. In fact, most states require construction companies to have it before accepting any projects within their jurisdiction. Also, most people tend to confuse the CGL policy with BR insurance according to a report done by the SB One Insurance Agency.
Builders Risk Insurance
Also known as Inland Marine coverage, BR policies cover materials and structures during construction. For example, if a fire breaks out and destroys all the lumber, this policy should pay for a new batch, cushioning you from the unexpected loss.
Workers Compensation Insurance
Construction sites can be dangerous workplaces, especially when heavy equipment and power tools are involved. If a worker sustains injuries while on the job, the construction company is liable to pay medical bills, lost wages and other related expenses. The WC policy covers this expense, leaving you in a position to hire a replacement without breaking the budget.