What is Insurance?

Insurance, in the context of the construction industry, refers to a contract known as an insurance policy, that a company or individual buys from an insurance provider to reduce the financial risk associated with potential loss or damage. There are numerous types of insurance policies like liability insurance, builder's risk insurance, and workers compensation that are specifically designed to safeguard construction businesses against various hazards. For example, if a construction site accidentally experiences unexpected damages, having proper insurance can alleviate the burden of these costs. Each insurance policy has a premium and a deductible, and the terms and conditions can extensively vary based on the policy. The selection of insurance types and coverage should be made meticulously considering the nature and scope of the construction project.