3 FAQs about Covid-19 and Builder’s Risk Insurance

Do you really know everything you need to know about Covid-19 and Builder’s Risk Insurance? The construction industry is not exempt from the disruptive impact of the coronavirus pandemic. Covid-19’s impact is easy to see. Construction sites are standing quiet and meeting project deadlines is becoming more and more unlikely. But what does this mean to your business?

3 Common concerns

Here are 3 things you should know about Covid-19 and Builder’s Risk Insurance 

1. The consequences of preventative measures

But how has it come to this? Let’s take a look at some of the preventative measures that are putting serious pressure on contractors.

• Health and safety concerns:  Limiting human contact is one of the few ways to curtail the rapid spread of coronavirus. In order to achieve this, municipalities have closed businesses across most industries, including construction. This has resulted in the delay in the start of new projects. On the opposite end of the spectrum, the completion of projects is delayed.

• Financial caution: Limiting financial exposure is vital for investors and lenders. With the threats to the economy, financing for construction projects is being withdrawn or frozen whilst reassessments are made. Many contractors are worried that projects will be abandoned, and funding for new ones will be withdrawn.

2. What protection do you have?

If you have Builder’s Risk Insurance for any projects affected by these risk-mitigation actions, now is the time to take action. Here’s what you should know about Covid-19 and Builder’s Risk Insurance:

Generally, Builders Risk Insurance has two components:

1. Coverage for costs due to delay. This can include loss of earning and extra expenses.
2. Coverage for damage or destruction to a project

The second area of coverage does not apply to Covid-19 and Builder’s Risk Insurance because the coronavirus will not cause physical or structural damage to the project.

Under the first area of coverage, you could have protection for:

• Additional security costs to protect the construction site during the stop-work order
• Costs arising from supply chain disruptions
• Project financing costs
• Loss of earnings

3. How to be proactive

We agree: it’s a difficult situation that can really get you down. But this doesn’t mean that there is nothing to do. Many contractors are taking the time to investigate whether their insurance coverage protects their businesses from financial loss related to the impact of the coronavirus.

In order to do this effectively, you should consult with an insurance expert. Now is the time. We advise that you do this as soon as you can, before you get caught behind a bottleneck of contractors all asking the same questions.  Insurance companies are likely to face thousands of requests for insurance assessments or policy extensions.

Professional advice about Covid-19 and Builder’s Risk Insurance

At Builder’s Risk Insurance we focus on Builder’s Risk coverage for the construction industry. What does this mean to you? We are up to date on changes in the industry and how they could affect your contractor business. Our experienced consultants can assess your coverage. Take quick action and speak with us at Builder’s Risk today. Call 877 960 0221.