Course of construction insurance. A complete guide
Course of construction
Course of construction (COC) is a specialized type of insurance policy that is designed to cover "all risks." These risks are typically associated with the hazards, accidents and incidents that might arise during the course of a construction project.
Course of construction insurance usually includes various coverages in one policy. Moreover, two specific types of insurance are combined in a course of construction policy.
We will cover everything you should know about course of construction insurance in our guide, including who requires this type of policy, and when it is commonly used.
Table of contents:
- What is course of construction insurance?
- Who needs course of construction insurance?
- What does course of construction insurance cover?
COC insurance requirements
COC insurance cost
Factors that affect course of construction costs.
Whatever your insurance needs, Pitsas Insurances can help you answer any questions. You can find our full details and advice for receiving quotes at the end of this article.
What is course of construction insurance?
Course of construction insurance (COC) is also known as builders risk insurance and construction all risk insurance.
You will see these insurance names used interchangeably, however, each insurance policy's details and the types of coverage of each will differ between the insurers offering them.
COC is commonly issued under the names of a contractor and the client, or a business and its customer.
In short, course of construction insurance is a type of construction insurance, and there is another clue in its title. COC is designed to cover the insured while a building or structure is in the process of being built.
This type of insurance combines two policies which are typically sold separately. Therefore, it is a specialized insurance policy, and it provides coverage for two of the most common risks on construction projects: third-party injury and property damage.
Damage to property can include but is not limited to: damages caused during renovation, the improper construction of structures, accidental mistakes when erecting structures, and damage to temporary on-site structures.
Third parties including subcontractors or guests may also become injured while you or your employees are working at a construction site, COC covers these hazards.
A course of construction insurance bridges the gap between the two prevalent risks associated with the trade into one common policy.
Usually, third-party injury and property damage insurance coverages are separate. COC insurance is designed to combine the two into one comprehensive package.
Who needs course of construction insurance?
Many businesses and organizations involved in construction choose to take out course of construction insurance. Those businesses include but aren’t limited to, property developers, land development firms, owners of projects under construction, building contractors, and local authorities.
Typically, both employer and contractor take out COC policies. As mentioned earlier, in some cases, other parties have the option of being named to the policy.
The aim of course of construction is to ensure those parties affected by the work, and those assigned to the policy are covered on a project.
This insurance policy covers the insured, regardless of the types of damages caused to the property or who caused it, with some exceptions that will be outlined in the policy.
What does course of construction insurance cover?
As noted earlier, course of construction insurance is an insurance coverage type specifically for structures and buildings while they are being constructed. We will examine this, and what COC covers in more detail.
While other business policies such as commercial property insurance typically do not cover structures during construction, COC insurance does and covers many risks combined.
Furthermore, COC policies usually have different options to cover the following types of properties:
- Building materials.
- Foundations in construction.
- Fencing, paving and outdoor fixtures.
- Lawns and gardens.
- Scaffolding and temporary structures.
When it comes to all risk, builders insurance or course of construction, whatever name is used, this type of insurance policy generally covers these common types of construction projects:
- Constructing commercial property.
- Residential remodeling (eg. replacing windows).
- New residential construction and builds.
- Building model homes and its contents.
This list is not exhaustive. You may find that insurance providers can offer you a COC policy customized to your needs, if your construction project isn't listed here.
When it comes to the types of damages covered by this insurance type, like most policies, COC protects against certain types of damages and there may be exclusions that apply.
The most basic course of construction policies will cover damages caused by extreme weather events, accidental fires, and vandalism, to name a few. However, damages from volcanoes or earthquakes will generally not be covered, unless specific coverage for those types of incidents is added to the insurance policy.
Most insurance providers also specify other exclusions that protect them from covering certain damages that occur from policyholder negligence or under very specific conditions.
In contrast, most insurers will offer premium coverage options that extend coverage limits and insurable events.
Even though higher premiums equal higher costs, these additional policies can be ideally suited to some policyholders' needs and provide them with peace of mind that is priceless.
COC insurance requirements
For small businesses that work directly with homeowners or small projects, COC insurance is usually not required for the projects they take on.
Most small-scale projects and home renovations will not ask you to provide proof of your insurance, however, there are exceptions.
On the other hand, large-scale projects almost always require contractors and businesses to carry course of construction insurance coverage.
Large construction projects working with any small business owner, subcontractor, or contractor will usually require proof of COC insurance before hiring you.
As a general rule of thumb, although the place in which you live and work may not require course of construction insurance, you should consider COC insurance as a requirement for your business. There may be exceptions to this rule, so it’s always wise to seek guidance about the requirements in your location.
The benefits that builders risk insurance provides far outweigh any cons. It’s good practice to be insured with this type of coverage for your clients and employers (or employees) and not to mention for yourself.
Requirements summary
While course of construction insurance may not be required by the law, you are usually required to have insurance from your employers and/or contractors as you could be held personally liable for a mistake on the job.
Key takeaways
- Course of construction insurance is a specialized type of policy that combines coverage for third-party injury claims and property damage: the two primary types of risks on construction projects.
- Damage to property can include but is not limited to, damages caused during renovation, the improper construction of structures, accidental mistakes when erecting structures, and damage to temporary on-site structures.
- Third parties including subcontractors or guests may become injured while your business is working at a construction site. COC insurance covers these hazards.
Course of construction insurance covers damage costs while a building or structure is still under construction. The damages caused by fire, vandalism, and weather events may be covered by your COC policy.
While other business insurance construction policies protect against claims surrounding equipment and people, most won't cover structures and buildings which are in the process of being built.
Builders risk policies ensure that your business won’t pay for damage expenses before your work at a construction site is completed. Accidents can happen at any time during a construction build, therefore, it’s worth ensuring both types of coverages are part of your plan.
With COC insurance, you can be assured that both third-party injury claims and property damages will be covered, in one comprehensive policy.
You also have the option to choose from additional insurance coverage to add on to your policy should you need any additional protection.
If you're considering choosing COC insurance for your business, you should read on to find out what affects the costs of this type of insurance to understand your options.
COC insurance cost
The cost of COC insurance varies from business to business, due to numerous factors.
In addition, many course of construction policies may cover different types of situations if premium coverages are added. All of these factors combined will influence the cost of a policy.
Factors that affect course of construction insurance costs
Even though course of construction insurance policies are customizable and can vary in what they cover, they are usually influenced by the same factors, which are:
- Location of the project.
- Size of the business or project.
- Coverage limits and deductibles.
- The credit history of the business and insured.
- Business or contractor's level of experience.
The factors listed above affect the undertaker’s estimations of losses and the risks associated with insuring you, your project, or your business.
COC insurance quotes
When considering course of construction insurance for your business, we recommend receiving quotes to know your options.
The process will be easy and hassle-free with the following businesses. All can provide simple quotations while offering you a high level of service.
Course of Construction Insurance USA
For companies registered in USA you can receive quotation from Next Insurance.
Course of Construction Insurance UK
For companies registered in UK you can receive quotation from Simply Business.
Course of Construction Insurance Cyprus
For companies registered in Cyprus you can receive quotation from Pitsas Insurance by completing the quotation.
Our team of insurance experts can help you secure customized construction insurance while working with your financial budget.
Pitsas Insurances
Limasol, Cyprus
07.11.2022