Managing a construction project takes skill, coordination, and responsibility. It also comes with serious risks. Construction Project Management Insurance helps protect professionals who oversee construction projects. This includes project managers, consultants, construction management firms, and design-build contractors.
The exact coverage you need depends on your role, the size of your projects, and your responsibilities. Below are key types of insurance to consider if you manage construction projects:
Professional Liability Insurance (Errors and Omissions)
Professional liability insurance is critical. It protects you if a client claims you made a mistake in managing the project. This includes errors in scheduling, budgeting, design coordination, or oversight.
If your actions—or inactions—cause delays, cost overruns, or other problems, a client could sue. This policy covers legal defense costs, court fees, and any damages awarded. It applies whether the mistake was accidental or based on miscommunication. If you miss a key deadline or fail to flag a design flaw, this coverage can save your business.
General Liability Insurance
Construction sites are full of risks. General liability insurance covers bodily injury, property damage, and personal injury claims not related to professional services.
If someone trips on-site and gets injured, or if a subcontractor damages nearby property, this policy helps. It covers medical bills, legal fees, and settlements. It also includes premises liability, products liability, and completed operations coverage—important for any construction-related work.
Contractual Liability Insurance
Contracts are a big part of project management. Often, contracts include clauses that make you responsible for the actions of others—especially subcontractors. Contractual liability coverage protects you from claims arising from these agreements.
For example, if a subcontractor makes a mistake and the contract holds you responsible, this policy helps cover the cost. It also applies to indemnification clauses or other risks you assume in writing.
Pollution Liability Insurance
Construction activities can sometimes lead to environmental problems. If your project causes pollution—like a chemical spill or contamination—pollution liability insurance steps in.
It covers cleanup costs, environmental damage, bodily injury, and property damage linked to pollution. If a fuel leak at a job site pollutes nearby soil or water, this coverage helps handle the fallout.
Builder’s Risk Insurance
This policy protects the actual construction project during the build. Builder’s risk insurance covers damage or loss to the structure, materials, and equipment on-site.
It applies to losses from fire, theft, vandalism, windstorms, and more. If your partially completed project is damaged in a storm or if someone steals building materials, builder’s risk insurance can help you recover costs.
Delay in Completion Insurance / Performance Bonds
Project delays can cost thousands—or more. Delay in completion insurance helps cover financial losses due to project slowdowns. This includes penalties, lost income, or added expenses from missed deadlines.
Performance bonds offer a guarantee. If your company—or a subcontractor—fails to meet contract terms, the bond provides funds to complete the project. These tools are often required on large public or commercial jobs.
Subcontractor Default Insurance (SDI)
You rely on subcontractors to do their part. But sometimes they fail to deliver. Subcontractor default insurance protects you if a subcontractor walks off the job, goes bankrupt, or fails to perform.
It covers the cost of replacing them and continuing the work. SDI helps avoid delays, added costs, and lost contracts when a subcontractor doesn’t meet their obligations.
Property Insurance
If you own equipment, computers, or tools, property insurance protects them. It covers your business property at the office, in storage, or even in transit.
If fire damages your office or someone steals laptops from your job trailer, this policy helps you replace them. It also covers physical assets used to run your project management operations.
Workers’ Compensation Insurance
If you have employees, workers’ comp is essential. Most states require it by law. This insurance pays for medical bills, lost wages, and rehab costs if an employee gets hurt or sick on the job.
Whether they fall at a site or suffer a repetitive strain injury from office work, workers’ comp helps them recover. It also protects your business from lawsuits related to workplace injuries.
Commercial Auto Insurance
Project managers and staff often travel to job sites and meetings. If they use company or personal vehicles for business, you need commercial auto insurance.
It covers damage from accidents, liability for injuries, and repair costs for vehicles used on the job. If your project manager crashes on the way to a site visit, this coverage ensures your business isn’t stuck with the bill.
Final Thoughts
Managing a construction project means more than just staying on budget. You’re responsible for timelines, safety, communication, and coordination. Mistakes or delays can lead to lawsuits and major financial losses.
Construction Project Management Insurance gives you the protection you need to manage with confidence. From professional liability to auto coverage, each policy plays a vital role. As your projects grow, so do your risks. Make sure your insurance keeps up.
Need help building a custom insurance plan for your construction management business? Call Combined Insurance Service LLC at 816-847-1911. We’ll help you protect your work—before problems arise.