Adequate insurance coverage is an important management problem for contractors. Part of the solution is to obtain a good understanding of the coverage provided by various types of policies and to become familiar with some of the grey areas that need to be covered at the time such policies are written.

ALL-RISK INSURANCE DOESN'T COVER ALL RISKS

As applied to the construction industry, the term all-risk insurance is widely misunderstood, largely because there are some risks which are, in fact, not covered. There are two types of exclusions. The first type is the unwritten exclusion. In the second type, there are written exclusions where certain risks are specifically excluded from coverage.

COMPREHENSIVE GENERAL LIABILITY INSURANCE

Another type of insurance common in the construction industry is the comprehensive general liability policy. The concept of this policy is simple. The language starts out by providing that the insurance company will pay all damages for which the insured is legally obligated due to personal injury or property damage if the loss is both covered by the policy and caused by an occurrence within the policy period.