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Why real estate developers need insurance

On Behalf of | Jun 19, 2023 | Risk Management

As a real estate developer, you’ll be all too aware that every part of the building process comes with its own risks. You’re exposed to being liable for a claim from day one. 

To protect yourself, your employees and your business you know that it’s important you have the right insurance in place. What are the risks to you if you don’t? 

1. You may find yourself liable for a negligence claim

As a developer, you’re responsible for the acts and omissions of everyone working for you. As humans, people make mistakes. If you don’t have the right professional liability insurance in place, you may find yourself facing a hefty claim against the company if the mistakes that were made are significant and caused damage or injury. 

2. You might not be covered for construction defects 

After the development has been finished, a real estate developer’s worst nightmare is that issues come to light in the way properties have been constructed. It’s expensive, time-consuming and reputationally damaging. 

If you don’t have insurance in place to cover you in the event this happens, it can cost you a huge amount. Given that these defects may not be uncovered for many years, making sure you’re insured is even more important as it’s almost impossible to plan for financially. 

3. Extreme weather may topple your business 

As a developer, weather can be your best friend and your worst enemy. If you don’t have the right level of construction insurance in place in the event that you face extreme weather you can face a number of consequences including damage to properties and machinery as well as paying financial penalties for not finishing a job on time. 

A careful and experienced review of your insurance requirements and policy documentation at the outset can help save you time, money and legal hassles later.