What is Project Loss Insurance?
Abstract
Project loss insurance has the potential to save contractors from devastating project losses, no matter the cause. Project loss insurance coverage PLI covers actual or liquidated damages arising from the following: Price escalationsSubcontractor defaultEstimate mistakesDelay costsLow productivityMaterial delivery delaysUnforeseen site conditionsBad weather Although PLI can be purchased by any contractor or construction manager, its best use may be with employee-owned companies. Learn more - Contractor Insurance: 17 Types of Insurance for Construction Businesses How project loss insurance works A contractor applies for a PLI policy and provides financial statements and work in progress reports. How much does project loss insurance cost? The premium for a PLI policy is based on the amount of revenue a contractor receives on each enrolled project. Project loss insurance: The pros and cons Pros Purchasing a PLI policy entitles you to consultation services provided by the insurance company. Business interruption insurance If you suffer substantial losses due to fire or a cause covered by property insurance, you can recover the costs to keep your doors open with business interruption insurance. Subcontractor default insurance Subcontractor default insurance protects general contractors and project owners from the financial risk when a subcontractor defaults on a project.
