Team Ctf

Do Construction Managers Need Business Insurance?

According to reports by the Occupational Safety and Health Administration, one in every five construction workers in the US dies on the site due to site-related injuries. In 2018, 21% of all deaths in the entire private sector industry came from construction.

These statistics are frightening. They also paint a very grim reality that construction managers across the US need to face.

The task of a construction manager is wrought with challenges. If anything were to go wrong on-site, the construction manager might become very vulnerable to lawsuits. These legal actions can come from either the third-party suppliers who provide labor or the clients themselves.

Business insurance can become a very powerful tool for construction managers caught in a lawsuit. Here we explain how business insurance will benefit you and where you can purchase your insurance.

  1. Business insurance can provide you legal protection in the event of on-site injuries

As discussed above, on-site accidents are common on construction sites. As a construction manager, you will be in charge of safety on the site. Not just of your own employees but also of workers who have been hired from third-party vendors.

If something happens on-site and an employee is temporarily or permanently injured or there is a fatality, you can be sued on the grounds of workplace negligence. This type of lawsuit can cost you thousands of dollars in court fees and damages.

Business insurance can offer you the financial protection you need to pay for these legal expenses. This insurance will ensure that you’re not forced to stop your project because of your inability to pay these hefty fines.

  1. Business insurance can indemnify you if on-site accidents cause financial loss to your client

In some contracts, the client who has commissioned the project may be required to take responsibility for on-site safety. If there’s an accident or death, your client may be sued, and this may result in unanticipated financial losses. Any damage to their property will also cost them thousands of dollars and be a huge setback to the completion of their project.

Your client may then initiate legal action against you. With business insurance, you’ll have a safety net in case such an eventuality occurs.

Another scenario where business insurance can be very useful is in protecting you from lawsuits by the client’s clients. For example, an archway breaks down and injures a visitor a year after the construction was completed. Your client may sue you for poor quality work and negligence. A business insurance’s coverage lasts for a long time, and you’ll have indemnity months after the project’s completion.

  1. Business insurance can help you protect yourself against claims of misrepresentation and bad advice

As a construction manager, your job is to oversee everything from the design of the new build to procuring the resources to actual construction and post-construction activities. You will be requested by the client to guide them in choosing the building site, determining the design of a building feature, or deciding how close to the seashore you can construct the property. Third-party staff may also approach you for advice with the tasks they do.

Every construction manager gives advice to the best of their ability, and you may have done so too. But if this advice proves to be faulty for the client, you may stand to be sued in a court of law. For example, you may deem a particular plot by the seashore safe from floods because there is no precedence of flooding in the region. But if there is a flood a few months later and your client’s property is damaged or people get injured, you may be sued by them on the grounds of misrepresentation and bad advice.

Business insurance can protect you against such claims. It ensures you don’t dip into personal finances to pay damages for injury to property or people.

  1. Business insurance is a legal requirement in some states

Many states in the US have their own unique laws pertaining to specific industries. While some states may not mandatorily require you to have business insurance, others do. Some types of business insurance, such as the Worker’s Compensation Insurance, are mandatory federally. Not having business insurance can create non-compliance issues and you may be sued by the state for not conforming with industry regulations.

Add to this any lawsuits that you may face due to on-site accidents, and you’ll stand to lose millions of dollars. Business insurance is the safest way to protect your finances, reputation, and business.

Indemnify yourself with business liability insurance for construction managers

Professional Liability Insurance, offers indemnity against claims of negligence, poor quality advice, and misrepresentation by you or one of your employees.

General Liability Insurance provides financial protection for claims arising out of physical harm (i.e., temporary or permanent work injury) or death on the construction site. This policy also safeguards your business if the client initiates a property damage legal case.

Worker’s Compensation Insurance gives you the financial freedom to meet the costs of an on-site injury, disability, or fatality. This insurance covers everything from court charges to disability support to funeral compensation to the victim’s family.

Finally, it’s important to remember that on-site accidents aren’t limited only to the client or the third-party vendor. The employees under your payroll, your equipment and vehicles, and anything else that you supply to the construction site are also at equal risk. The Business Owner’s Policy offers coverage to all types of business damages and liabilities that you may face during the course of a construction project. This policy is a lifesaver for small companies, which may risk facing bankruptcy because of their inability to resume operations after the expensive lawsuit.

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