Theft, trespassing, fires or other losses are constant threats on vacant construction sites. Losses might include not only the value of damaged or stolen materials but also the liability of an individual being injured on the property and the loss of time if a crucial piece of equipment is damaged or stolen. The insurance risks and liabilities associated with vacant construction sites can be extensive. To ensure that you are adequately protected, it is important to know the risks you face. In addition to purchasing comprehensive insurance coverage, there are numerous preventive strategies you can adopt to maintain vacant properties in a way that reduces risk and liability.
Potential Risks
Like any vacant structure, vacant construction sites are first and foremost an obvious target for theft, trespassing and vandalism. Keep in mind that contractors can be held liable for injuries sustained by children that trespass or play in vacant construction sites. Moreover, vacant construction sites are susceptible to fire. A study by the U.S. Fire Administration reveals that each year, an estimated 4,800 construction site fires and cause $35 million in property loss; in most cases, the sites are vacant. Firefighters on construction sites are also twice as likely to be struck by debris or objects than firefighters in residential fires.
Other Ways to Mitigate Risk
In addition to extending coverage, there are some simple steps that contractors can take to limit their risk and liability.
- Prevent vandalism – leaving construction sites properly lit and with sufficient signage can help keep thieves and vandals out.
- Limit liability – make sure property is free of significant hazards that could cause injuries to anyone on the property – this could include police officers, maintenance workers, firefighters or even trespassers. Walls, equipment, ditches and other physical features could be classified as attractive nuisances should they cause the injury of anyone on the property.
- Avoid damage – remove all access material and combustibles from in and around the site. Inspect the site regularly for potential fire hazards and remediate them as soon as possible.
Builder’s Risk Insurance
Many times your contract with the property owner will require you to purchase builder’s risk insurance, which protects the property and any insurable materials on site against fire, vandals, lightning, wind and other similar forces while it is under construction.
Because of the increased risks and liability associated with a vacant site, these types of insurance tend to be costly. It is important, though, to look beyond the price and consider the suitability and comprehensiveness of the coverage being purchased.
To obtain vacant property insurance or lean more about risks to vacant property, contact INSURICA today.
This is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. ©2025 Zywave, Inc. All rights reserved
About the Author
Share This Story
Related Blogs
Making an Acquisition? Why the EMOD Shouldn’t Be Overlooked
When acquiring another company, there’s no shortage of factors to consider. From valuing physical assets to estimating potential synergies, the due diligence process can be complex. However, one critical element often overlooked is the EMOD.
2026 Employer Mandate Update
In July 2025, the IRS released new guidance increasing both the affordability percentage and penalty amounts under the Affordable Care Act’s employer mandate for the 2026 plan year. These changes will affect how Applicable Large Employers (ALEs) determine affordability and assess compliance risk moving into the next benefits cycle.
Facility Rental: Best Practices for Non-School Use
As community hubs, school districts often open their doors to outside organizations for events, activities, and gatherings. This facility rental for non-school use can benefit the community, but it also comes with potential risks. School administrators must take proactive steps to protect district property, reduce liability exposure, and ensure compliance with state laws.