Construction companies work in environments prone to crisis, and contractor business insurance is the first step of crisis management. However, as a construction contractor, you cannot rely on contractors’ insurance only. Specialized insurance coverage such as Builder’s Risk is also required to make sure your construction company is prepared to respond to the crisis quickly.
Builder’s Risk is a specialized insurance policy that compensates against property damage during a specific project.
Builder’s risk is supposed to be included in your insurance protection before starting a project. It must be renewed if a construction project exceeds its tenure. It protects the property against the following damages.
The property owner, a company involved in a construction project, third parties associated with a project — in short, all the parties associated with a construction project need coverage to protect their interests. However, according to the project’s nature, some other parties can also be included in the policy.
Builder’s Risk insurance provides financial protection to the building, structure, foundation, fencing, and labor cost. However, the builder’s risk does not provide protection against poor craftsmanship, substandard use of materials.
Builder’s Risk insurance is designed to help you finish your projects on time. Suppose a project is facing a delay in completion due to certain types of damages. In that case, the policy will pay for your project’s direct and indirect costs. These are the most commonly covered areas of a project:
Builder’s Risk policies vary from area to area, and may have specific exclusions. For instance, you may not get coverage for earthquakes or flood coverage in areas with high earthquakes and floods rate. However, some companies may provide financial coverage for these factors at a very high cost. Your policy may exclude the following damages:
Every project has a different course of completion; that’s why you have to buy a Builder’s Risk policy for every project separately. If your project is more vulnerable to damages, you must add extended insurance covers for maximum protection. However, the following factors play a crucial role in determining the cost of the Builder’s Risk.
Construction companies cannot predict how a project is going to end. That is why the construction industry has the highest failure rate. In 2019, 53% of construction companies were closed due to less profitability. You must adopt the standard risk management practices like insurance protection if you want to increase your success chances.
Call at our helpline 877 960 0221 to get a quote for your project.