10 Common Construction Insurance Claims From Contractors

Insurance claims are a seemingly unavoidable aspect of working in the construction industry. Whether due to accidents, delays, or unforeseen issues, most contractors and construction professionals will face a claim at some point in their careers. 

However, many of these situations are preventable with proactive planning, clear documentation, and consistent job site practices.

Nevertheless, even with proactive planning, meticulous documentation, and consistently following job site procedures, things can go wrong – fast.

Here are 10 common contractor and construction insurance claims from our clients we helped resolve:

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1. Damaged Tools

A general contractor left their tools stored in a secured part of a new residential construction site overnight. 

While work was underway, one of the new homes being built caught on fire. Although the cause of the fire was not our client’s fault, their tools inside the building were destroyed in the blaze. 

Their tools and equipment coverage paid over $6,500 to replace the destroyed tools.

 2. Property Damage Caused by Severe Weather

One of our roofer clients was replacing a roof for their customer when a ferocious rain and windstorm descended on the area. 

The roofer secured a tarp over the areas where work was incomplete to protect the roof from further damage. Despite the effort, water from the storm flooded into the customer’s home and damaged their kitchen. 

Our client’s general liability coverage paid over $13,000 to repair the damages to their customer’s kitchen.

3. Theft of Tools

Another of our general contractor clients had their tools nicked. 

After storing their tools in a secured locker overnight on a construction site, a thief used a ladder to climb over a security fence and gain access to the premises. Once inside the perimeter, the thief used the ladder to access a window on the second floor, which they smashed and then entered the building. 

They stole our client’s tools, along with the tools of other contractors also working at the job site. 

Our client’s tools and equipment policy covered over $3,500 to replace his stolen tools.

4. Accidental Property Damage Caused by Tree Trimming

One of our professional landscaping clients had an unfortunate event befall them.

While trimming tree branches for a customer in their backyard, a branch fell suddenly and damaged the screen of the customer’s outdoor flat-panel TV, rendering it unusable. 

Our client’s general liability insurance policy covered over $6,000 to replace the TV.

5. Incidental Water Damage

Another of our general contractor clients was replacing ceiling tiles for a customer whose business operates in a shopping plaza. 

While installing the tiles, he accidentally bumped into and set off the plaza’s fire sprinkler. Before it could be turned off, water flooded the customer’s unit as well as accompanying business units in the plaza. 

Our client’s general liability insurance covered over $45,000 in repairs for the water damage in each unit.

6. Significant Third-Party Water Damage

One of our plumber clients was hired to replace a hot water tank for a residential customer and did so. However, a few weeks later, the customer reported they had significant water damage in their home. 

An engineering inspection was required to determine the cause of the leak, and it was found that our client had overtightened a fitting, which resulted in its failure. 

Their general liability insurance covered over $125,000 to repair their customer’s home.

7. Expensive Tools and Equipment Theft

Our client, a general contractor specializing in building new homes, was working at a job site. Overnight, their scaffolding equipment was stolen.  

However, they smartly detailed this equipment on their equipment coverage – the equipment stolen was specifically listed, including the make and model of the scaffold, in their policy. 

Their tools and equipment policy covered over $70,000 to replace it.

8. Accidental Water Damage

One of our clients installs cable and internet lines. While installing cabling at a large, multi-unit building, they accidentally drilled into a water line. 

It took a few hours for the water to be turned off, resulting in significant water damage throughout the building.

Their general liability insurance covered over $200,000 in repairs for the water damage.

9. Accidental Third-Party Property Damage

Our client is a painter who was hired to paint the exterior of a customer’s home. 

While getting set up, they unfortunately tripped and knocked over a paint can, which spilt paint onto the customer’s driveway. 

Their general liability coverage paid over $11,000 to tear out and repave the damaged portion of the driveway.

10. Sudden Equipment Malfunction

One of our contractor clients was working on a new build project. While working, their power generator suddenly caught fire. The fire quickly spread to other equipment. 

Our client wisely had all their equipment listed on their policy. 

Their tools and equipment policy covered over $75,000 in costs to replace the damaged generator and repair other equipment that was destroyed in the fire.

Protect Your Finances & Build the Future: Get Business Insurance Now

You’re in the business of building and fixing structures, landscapes, and infrastructure in your community. However, despite how cautious and prepared you and your crew are, sometimes the unexpected happens. That’s why it’s vital to protect everything you’ve built or serviced with low-cost construction insurance.

Complete our online application in under five minutes to receive a free quote.

Let our team of licensed brokers get the protection your construction business needs from one of over 50 insurers in our partner network, customize it to suit your requirements and budget, and issue policy documents and a certificate of insurance in 48 hours or less.

– Reviewed by Reagan Elly, Senior Claims Advisor, and Marco de Bruyn, Team Lead, Contractors, at Zensurance.