There are 3 basic types of insurance you need when you build a home:

1. Worker's Comp:

This is generally required by law if you have more than one person working for you, but is often overlooked in the home building process, as well as in many other companies. What worker's comp does is provide wages protection for your subcontractors, and helps protect you from a lawsuit. The great thing about it is that if someone gets hurt on your job worker's comp covers all medical benefits, and provides wage loss for up to 60% of the projected income. This is great to provide for your workers because it means in the event that something does happen to them, you are less likely to get sued, and more likely to come out on top of a law suit because you provided necessary coverage. It also makes you a better employer because it shows you care about the people you hire.

You can purchase worker's comp policies just for the duration of you project, and cancel them once your house is complete. It is an expensive policy to hold, but one that is crucial in the home building process. The expense will be well worth it, especially if you end up using your policy.

2. Liability Insurance:

This basically means that if a third party enters your premise invited or not, and gets hurt, you are covered. This covers pretty much everyone from kids playing on the site to material suppliers dropping off your order. It is important to note that just because you have a warning sign, or a sign discouraging people from entering your site does not limit your liability if they get hurt. Liability insurance protects you as much as it protects those that enter your premises. You should talk to an insurance provider about how this will work for you and your site. It can be expensive, but it does not have to be, so explore your options.

3. Other Insurance Coverage:

Other insurance coverage seems like a broad topic, and it is. In fact, this is something that you should talk to an insurance agent about, but it too is important to have. You want to make sure you have coverage in the event of fire, windstorm, or other natural disaster. You want to include smoke damage in that policy. You will also want to have coverage against theft, as it is common in construction, however, this is not enough to cover you as the deductible is generally high, so protect yourself from theft in other ways as well, such as locking materials up. You want to protect yourself from vandalism, which also has a high deductible, but is valuable coverage to have. And, last but not least, you want to make sure you get replacement value for your anticipated value of your completed home. This is a lot of insurance to have, but you will want all of it, so look for a comprehensive policy.

While insurance can add expense to the home building process it is critical and necessary to have it. You will be glad you spent that little extra in the event that you need to use your insurance, so talk to your insurance provider and ask for advice on what and how much insurance you need for your project, and have them show you the expense of replacing and paying for things without insurance, and you will see the wisdom and value in getting insurance.