There is no such thing as standard or basic business project insurance coverage. Various types of coverage are available for short-term business projects but it is not something that a project owner or manager can simply shop for. The practical way to approach this is to first determine what insurance coverage is required and then search for a company that can provide it to you. The coverage will ultimately be tailored to unique location, industry and client demands. Every project is different so every insurance coverage package will be different.
Certain skills are required to identify the pertinent risks for any specific project. Most new ventures of this type will hire a specialist to make those determinations. He will perform a risk analysis that is designed to isolate potential risks associated with projects of this character. A project risk manager should have experience with and knowledge of the areas that directly impact the project. As a rule, in addition to an understanding of the details of the undertaking, for example a construction project or new business venture, he or she must be well versed with the legal, accounting, financial and insurance aspects as well.
It is not reasonable to expect even the most talented manager to come up with a comprehensive analysis that recognizes all of the possible loss factors. It is equally unrealistic to expect her to find an insurer that is willing to provide insurance coverage for every imaginable event without breaking the bank. That reality means that not all risk factors will be included in any short-term business project insurance plan. The task is to manage the cost of insurance and to protect the project by pinpointing those potential risks that pose the most probable threat.
One of the important ones is project delay risk. This coverage protects loss caused by one of the integral parties associated with the project. If all but one of the subcontractors does stellar work, the one that does not will kill the project.
A hold harmless clause makes subs and vendors liable for any third party claims that arise because of their activities relative to the project. It is advisable to obtain third party liability in any case to cover loss due to delays brought on by a diverse array of possible claimants, like environmental groups for example.
Material damage coverage protects against loss of material due to events such as fires, equipment malfunction and similar occurrences. There are others to consider also.
Once the risks have been identified, it is time to contact the providers who specialize in risk coverage with the list of particular coverage requirements.