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Contractors who are building a structure usually take out construction insurance in case a disaster or tragedy occurs on the construction site.
This type of insurance specifically indemnifies against damage to buildings and structures while they are under construction.
Unlike regular homeowner's insurance that protects you once you occupy a dwelling, construction insurance protects the developing structure, materials bought for the structure and any losses due to damage or theft.
Like all types of insurance you are making an investment on what might happen so that you can offset any potential losses.
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