Construction Insurance Key Terms

Select the right policies with construction insurance key terms

All states require that contractors have a specific type and amount of insurance for workers and equipment. Contractors must carry at least the state minimum insurance to avoid tickets and penalties. There are many different kinds of construction insurance and terms used in construction insurance that some contractors may not be familiar with. Reviewing these terms and phrases will help you find the policies that will provide your company with the best insurance options.

 

Bid bonds

A bid bond is a written guarantee that the company will provide a bond on a piece of equipment, job or property before the item or property is purchased or the job is contracted. Once the contract is signed the company must provide a performance bond.
Try: Visit BusinessDictionary for more information about bid bonds.

Performance bonds

A performance bond, or surety bond, is a bond presented to a client by a construction company that covers the client if the job is not finished or damage is caused during the job.
Try: Learn more about performance bonds from Love To Know.

Umbrella liability

Umbrella liability is a type of insurance that covers companies against claims that are not covered in their primary policy. Umbrella policies normally insure a set amount and will pay up to that amount on anything the original policy does not include.
Try: Wise Geek provides more information about umbrella liability insurance. Visit the McGlone Agency to learn more about umbrella policies.

Wrap-up insurance

Wrap-up insurance covers multiple companies that work together on a specific job. Wrap-up coverage is only good for the specific job it is purchased for.
Try: Learn more about wrap-up insurance at the International Risk Management Institute. C-Risk provides details on what a wrap-up insurance policy can do for your company.

Corridor deductible

A corridor deductible is an insurance deductible that is applied to a major medical plan and pays only what the original plan does not pay. Corridor deductibles have specific dollar amounts specified in the contract that they will pay.
Try: Learn more about corridor deductibles Bob McCloskey Insurance. AllBusiness defines a corridor deductible.

Hired auto and non-ownership liability

Hired auto and non-ownership liability insurance is coverage for rental vehicles, temporary lease vehicles or vehicles that employees drive while working for the company.
Try: Insurevents has information about hired auto and non-ownership liability. Sadler & Company also provides information about hired auto and non-ownership liability.

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