The construction industry is constantly changing; new equipment is introduced, material costs fluctuate, and property values are always shifting. All of this affects the level of risk a company faces. Most construction businesses tend to stick with old insurance policies that don’t match what they actually own anymore. In today’s world, that can end up being a really expensive mistake.
Rising Values, Rising Risks
Over the past couple of years, inflation and supply chain disruptions have caused the cost of building materials and heavy equipment to skyrocket. An example of this is a backhoe or crane insured at its 2019 value could now cost 30–50% more to replace. If a company doesn’t have insurance that reflects the updated cost, it would end up paying a lot of money out of pocket if something happened.
Keeping Vehicles and Equipment Covered
Most construction companies depend a lot on their specialized machines and vehicles. But it’s very common for businesses to forget to check their commercial auto and equipment insurance policies regularly. It’s extremely important to make sure your vehicles are valued correctly, adding any new equipment, and covering rental or borrowed tools can help to prevent coverage gaps that could bring your projects to a halt.
Keeping Property and Projects Covered
From office buildings and warehouses to temporary jobsite trailers, property values and how they’re used can change a lot over time. If your insurance hasn’t been updated recently, you could potentially be uninsured or even break contract rules by accident. Doing regular checks on your builders' risks and property policies helps to make sure both ongoing and finished projects are properly protected.
The Bottom Line
Insurance isn’t something that you’ll only buy once; it needs to keep up with your business and your business changes. Construction companies should check their policies every year with their insurance advisors to make sure property, equipment, and vehicles are properly valued. Keeping coverage current helps protect your business from unexpected costs and keeps projects on track, no matter what happens. For more information, check out our website.
