Many construction companies bid a job and begin work not understanding that if this is the first job that they have ever accepted that has requirements for rigging, scaffolding, crane, and steel erection, then they are in a completely different territory as regards the type of insurance required. If they have not carefully reviewed the sections pertaining to crane insurance and are perhaps working with a company that does not have a lot of depth in that area, they could easily catch themselves short.
An important consideration is the insurance premiums. The construction company will have generally won the contract through a bidding process which will significantly drive down the price. The only way for the construction company to realize profits is to carefully control costs, particularly the significant costs. After the cost of materials and labor, insurance premiums rank near the top on most projects. The company will particularly want to ensure that there are no surprise costs during the execution of the contract.
The drawback of an insurance policy like this is that it is not truly tested until a claim is filed. If a claim concerning crane and scaffolding is filed and then denied because of improper coverage, the company could find that they are liable for the cost of the accident. Even with a small accident, the policy will have been identified as faulty, but will probably not be changed because the insurer won’t allow it, or if he does, he will charge enough to wipe out the profits of the job. In either case, the construction company is faced with having to complete the job knowing that they have insufficient coverage and a significant accident could bankrupt them. This shows the importance of obtaining proper crane insurance before entering the bidding arena.