Contractors and property owners can financially protect a property while it is under construction (or being renovated) with a builders risk insurance policy. Builders risk insurance was designed to offer protection against specific perils that construction sites can be exposed to. These perils include:
Builders risk insurance can be purchased on a number of different properties and projects, including:
– Residential remodeling projects
– Commercial property construction projects
– Residential new construction, both single home and multi-home projects
Coverage Terms and Limits
Builders risk insurance isn’t meant to provide the same level of permanent protection against perils as a traditional home insurance policy does. Instead, builders risk insurance can be underwritten and approved for short periods of time, generally ranging from 3 to 12 months.
When setting limits for builders risk insurance policies, property owners and contractors should consider the estimated completed value of the structure. This will include the cost of all materials present on the job site as well as labor costs, since the investment in both materials and labor will be lost if the job site is damaged completely.
What’s Builders Risk Insurance Does Not Cover
Builders risk insurance is not designed to cover liabilities caused by accidents or injuries to individuals on the job site. The policy provides no personal liability benefits and should therefore be supplemented by proper liability coverage. It also doesn’t provide benefits for employees who are injured on the job, a benefit provided by a workers compensation policy. Builders risk insurance is also not meant to guarantee the work of any contractor or pay damages for contractor negligence.
There are some acts of nature and man that builders insurance does not cover, such as:
– Other water damage
– Mud or landslides
– Employee theft
– Acts of war
– Government action, such as worksite shut down due to codes violations
– Contractual breaches
When Does Coverage Begin?
Builders insurance policies limit coverage to losses that occur after construction begins and before construction is completed. In other words, there must be some construction in progress in order for coverage to be in place.
Depending on the projects insured by builders insurance and the location of the property, there may be additional perils that need to be covered. Additional coverage can be added for:
– The loss of important documents such as blueprints
– Certain risks while traveling with materials intended for the job
– Earthquake and other earth movement
Saving Money on Builders Risk Insurance
One of the biggest risks that face the construction site for renovation or new construction is the risk of fire. Having a fire hydrant and/or fire department near the worksite will allow some cost savings on purchasing insurance.
Another way to get premium savings on builders insurance is to get multiple quotes from different companies. At our agency we work with several insurance carriers and are able to secure multiple quotes in order to ensure that you get the best most affordable policy for your project.
If you’re planning any construction projects, give us a call. Allow us to work with you to find builders insurance coverage that protects your projects, your wallet and your investment. We can combine this with many of your other contractor’s insurance needs such as bonds, liability and workers’ compensation insurance in order to create a complete insurance portfolio for your business.
Source by Beau Hearod