Depending on the work you do, you may need additional types of construction insurance. Other policies commonly purchased by construction businesses and contractors include:

• Builder's risk insurance: This policy provides coverage for a structure under construction, along with materials at a construction site. It's sometimes called course of construction insurance.
• Contractors pollution liability insurance (CPL): CPL covers legal costs related to harm caused by pollution at a construction site. You may also see it referred to as environmental insurance.
• Inland marine insurance: This policy protects construction tools and equipment in transit, stored off-site, or at a job site. Common types of inland marine insurance include contractor's tools and equipment insurance, which provides protection for newer items valued at less than $10,000, and installation floater insurance, which covers materials being installed or built by a contractor during a construction project.
• Commercial umbrella insurance: Umbrella insurance boosts the coverage on your general liability, commercial auto, and employer's liability insurance once the policy limit is reached.
• Mobile equipment endorsement: This addition to your commercial auto policy covers forklifts, tractors, and other machinery driven on public roads.

Construction licenses and permits are often needed in order to comply with state and local laws. This depends on the type of work you do and your location. For example, your state might require a license to do plumbing or electrical work, or you may need a town permit for pesticide application or tree removal.

As part of the licensing and permit process, you may need to pass an exam, get a contractor surety bond, or buy insurance. For example, general contractors in Californianeed to submit proof of insurance and a surety bond in order to get licensed.

Depending on circumstances, the contractor, building owner, or property developer may be responsible for insuring a construction project. Regardless of who insures the project, it's important to make sure that you're protected in the event of a lawsuit or other incident.

If you're not the one buying insurance, make sure you're listed as an additional insured on the policy. Anyone involved in a project could end up facing legal bills, even a subcontractor, which is why it's important to secure protection.

Construction businesses and contractors that purchase commercial auto insurance often:

• Have a vehicle titled to their business
• Drive to and from worksites
• Carry tools, equipment, or products used for work
• Transport clients or employees
• Rely on delivery drivers or couriers

Check the laws in your state to see when coverage is required.

Though it's possible to get short-term insurance for a project, continuous coverage benefits your business in the long run.

Most important, it means you're always protected against fires, theft, injuries, and lawsuits that could devastate your business. Additionally, you might need contractor insurance to bid on a project, work with a certain client, or get a license. Being insured means you're ready to take on any project, and it puts you a step ahead of your competitors in the eyes of clients and customers.

Finally, insurance companies often charge more when a company starts and stops insurance. Maintaining continuous coverage keeps your contractor insurance premiums low and is a key part of risk management.