Contractor’s Vs Builders Risk Insurance: What’s the Difference?
While both are related to the construction and maintenance industries, contractors’ insurance and builders’ risk insurance are two different types of policies made with different eventualities in mind. Both are types of construction insurance, however it may be that one business or individual takes out both types of policy at once or just one for separate stages of a build.
In this blog, we will be explaining what each type of insurance is, how they differ, and when you may need to consider them.
Want to know more about the different types of commercial insurance on offer? Take a look at our guide to commercial insurance.
What is Contractors Insurance?
Contractors’ Insurance is a type of public liability insurance for contractors that covers risks such as third-party injuries and property damage. It is advised that anyone involved within the construction industry – from general contractors to handymen and beyond – you should be looking to take out this kind of insurance. This is so you can be covered and avoid individual financial loss for any damages or defence.
Generally, contractors’ insurance may cover some or all of the below:
- Property damage (from negligent performance or theft)
- Bodily injury to a third party that leads to…
- Libel
- Invasion of privacy
- False arrest
- Wrongful eviction
- Personal injury
- Advertising injury (damage to intellectual rights of the policyholder)
What is Builders Risk Insurance?
By contrast, builders’ risk insurance covers against financial loss or covers the cost of finishing a project that has been delayed or damaged by specified risks. This can also include tools, materials, and equipment related to the project.
Some of the types of coverage that can be included in a builders’ risk insurance policy:
- Property damage from fire, explosions, lightning or hail, theft, etc.
- Costs and expenses from lost rental income, lost sales, real estate taxes or interest on loans taken out for the build
- Project-specific items such as temporary structures, debris removal, scaffolding, etc.
What’s the Difference?
The key difference between these two types of cover is that they handle different risks at different stages of construction. Contractors’ insurance provides more liability-based protection, whereas builders’ risk covers costs related to projects that have been subject to specific “perils”.
Alan & Thomas
Whether you’re looking for public liability insurance for contractors or general builders’ insurance, our commercial insurance team is here to help. At Alan & Thomas, we offer an extensive range of insurance for contractors and those involved in the construction industry. To discuss your unique requirements, contact us by calling 01202 754900, or email info@alan-thomas.co.uk.