Does construction insurance cover injuries?

Injury Coverage under Construction Insurance

Construction insurance is a combination of different policies, customized to provide broad protection for a variety of risks inherent to your business.

One of these risks includes the potential for injuries on-site. Injury coverage is not a stand-alone policy but is typically included within several types of insurance that a construction company might choose.

Liability coverage and Workers’ Compensation Insurance are two key components of a construction insurance package that specifically address injury-related concerns.

Liability Coverage for Injury

This policy is crucial for any construction business as it covers legal liabilities in case a third party (e.g., a visitor, client, or passerby) suffers an injury due to a construction hazard.

If a non-employee, such as a client, visitor, or passerby, is injured due to a construction-related activity, liability coverage becomes applicable. It can cover the associated costs, including but not limited to, medical expenses, legal fees, and any settlement or judgment amounts. For instance, if a piece of construction equipment malfunctions and injures a passerby, liability coverage would handle the ensuing costs.

Workers’ Compensation Insurance for Injury

This coverage is mandatory under provincial law and it’s designed to protect workers in the event they sustain injuries or illnesses while carrying out their job functions on the construction site. Workers’ Compensation covers expenses such as medical treatment, rehabilitation costs, and a portion of the worker’s lost wages while they recover.

In addition to these, construction companies may opt for specific coverage for equipment or machinery-related injuries, or policies that protect against injuries caused by natural disasters, depending on the nature of their projects and their risk assessment.

What’s the Difference Between Construction Liability and Workers Compensation Insurance?

The difference between the coverage in liability coverage and workers’ compensation insurance is who the injured party is. Liability insurance covers injuries to third-parties only, while workers’ compensation insurance covers injuries to employees only.

Circumstances Under Which Construction Insurance Covers Injuries

Understanding when and how construction insurance covers injuries can be pivotal in managing potential risks in the construction industry. Here are specific circumstances under which these policies generally provide coverage:

Workplace Accidents

One of the primary circumstances under which construction insurance provides coverage is in the event of a workplace accident. If an employee gets injured due to a fall, equipment malfunction, or any other job-related hazard, the Workers’ Compensation Insurance component of the construction insurance package would typically cover the associated costs.

Third-Party Injuries

Liability coverage comes into play when a non-employee is injured at the construction site or due to construction activities. This could include clients, visitors, or even passersby. In such instances, the liability portion of the construction insurance covers the resultant expenses, such as medical bills and potential legal costs. These third-parties could also include the owners, whether it’s residential or commercial construction.

Employer Liability

If a worker decides to sue the company for an injury sustained on the job due to alleged negligence on the company’s part, Employer’s Liability Insurance offers protection. It covers legal defense costs and any damages awarded in such lawsuits.

Injuries Involving Machinery or Equipment

Construction insurance often includes provisions for injuries caused by machinery or equipment malfunction. Depending on the specifics of the policy, it may cover both employees and third parties injured under such circumstances.

However, it’s important to note that there are exceptions and exclusions where injuries may not be covered. Common exclusions might include injuries resulting from willful negligence, those occurring outside of work hours or off the job site, or injuries from actions violating company policy or safety regulations. Hence, it’s crucial to understand the specific terms, conditions, and limitations of your construction insurance policy.