What’s the Difference Between Construction Insurance and a Surety Bond?

Nina Conner News

By Sarah Licata for AssuredPartners 

Construction insurance and surety bonds both provide different types of protection on a construction project, but a common misconception is that a surety bond is another type of insurance. So, what is the difference between the two?

What is Construction Insurance and How Does it Work?

Construction insurance is an agreement between two parties:

  • The construction business
  • Insurance company

In this arrangement, the business pays a premium and the insurance company takes on the risk of any claims. If a covered claim is made, the insurance company is financially responsible for paying out on that claim. Some examples of common construction insurance policies include general liability insurance, workers compensation insurance, inland marine, and builders risk insurance.

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