North Carolina is a popular place to build new homes; it’s just outside the top five most popular states, seventh out of all 50 in the US. Because of this, residential construction teams in North Carolina tend to stay busy.
Amid all the logistics of managing projects, submitting proposals, and more, neglecting a thorough exploration of the proper insurance requirements for your construction business can be easy. North Carolina residential construction teams, should invest in comprehensive insurance to protect against common pitfalls that can occur both on and off the job site.
Here is an overview of how the state of North Carolina treats residential construction insurance mandates and what types of coverage are essential for construction teams.
Is Insurance Mandatory in North Carolina?
In short, North Carolina does not impose any statewide insurance requirements that apply to all job types or locations. Instead, municipalities are responsible for this decision, meaning contractors in two cities might need to abide by two sets of insurance minimums.
However, across the state, a few types of insurance are regularly required or, at the very least, recommended, and residential construction teams will benefit by investing in these policies at a minimum. They are:
Builders Risk Insurance
Many things can go wrong on a job site, but only a few locations are as vulnerable as a residential structure that still needs to be completed. From exposed structural elements to the risk of fires when installing new electrical components, sites under construction benefit from insurance that targets the risks unique to this stage of the development process.
Builders’ risk insurance covers the job site should it suffer damage due to a wide array of protected hazards, such as fires and theft. It can also compensate the involved parties should a covered peril delay or interrupt the job.
General Liability Insurance
General liability casts a broader net to protect against issues the construction team may be liable for outside the job site or in situations not covered by builders’ risk. For instance, general liability can pay for medical treatment should a third party be harmed on the construction site or if an element of construction causes damage to someone’s property.
Some coverage for tools and equipment may be covered in either general liability or builders risk insurance, so be sure to read the fine print.
Commercial Auto Insurance
Construction teams that travel to and from the work site in company vehicles should utilize commercial auto insurance. This runs separately from personal auto coverage, which protects a person’s privately owned vehicles.
Suppose a company vehicle is involved in an accident or causes property damage or bodily harm to someone (in a collision or otherwise). In that case, commercial auto insurance can help cover the financial impact of the construction team’s liability. It can also compensate for the damage to a work vehicle caused by theft, vandalism, and specific perils such as fires.
Workers’ Compensation Insurance
A person rarely completes residential construction projects; instead, a team works together to address all of the needs of the building, from assembly to electrical and more. Teams made of at least two people should carry workers’ compensation insurance.
This type of protection covers employees of a construction business or those working under the umbrella of a managing firm should they fall ill or suffer an injury while at work.
The most common injuries in the field of construction are accidents involving machinery, head injuries, broken bones from falling, and burns or electrocution from the process of installing electrical work.
Suppose an employee is injured on the job. In that case, workers’ compensation insurance can pay for their medical treatment, physical rehabilitation, and the time they take off work to recover.
In the unfortunate event that an employee passes away due to a workplace accident, workers’ comp can provide remuneration to their families to assist with funeral costs and compensate for pain and suffering or loss of consortium.
Get Comprehensive Insurance Coverage from Industry Experts
If you are a residential construction team, you should consider how to properly shield your business from liability and financial harm due to accidents or damage during a construction project.
The experts at Burton & Company can help you explore the wide range of insurance coverages that will benefit your business and keep you in compliance with North Carolina’s jurisdictional rules. Contact Burton & Company to learn more.