What Does Your Builder’s Risk Insurance Policy Cover?
February 12, 2020
If you are a construction business owner, you already know that you need insurance coverage. But how do you know if Builder’s Risk Insurance is the one to have? Choosing the right insurance program can be harder than it sounds.
Here are 5 things to consider about Builder’s Risk Insurance.
1. Determine your Risks
Before you buy any insurance, do the 2-step check. It sounds obvious, but many contractors skip this step in their hurry to get on with the job.
- Know what protection you need.
- Find out if the policy gives this coverage.
When it comes to making a decision about any insurance, the first thing you have to do is to determine your risks. At the same time, you should have a clear idea of what you will really get out of this insurance policy.
A building business that is constantly changing and evolving has different insurance needs to a construction business that is slow and steady. Your business may have changed so much in the last 6-months that your risks are now far greater than they were last time you purchased insurance. This is why we encourage our clients to do regular assessments. The last thing you need is to discover that you believed that your business was protected, but it isn’t.
2. Do Some Research
Doing some online research is one of the best ways to learn about Builder’s Risk Insurance coverage. Some insurance companies operate online, like Contractors Liability or Builder’s Risk Insurance. Getting in touch is an easy way to learn about Builder’s Risk Insurance. Before you make a decision about an insurance policy for your construction project, you should have a clear idea of what you are getting into.
3. Find Out What Builder’s Risk Covers
Contractors buy Builder’s Risk Insurance to protect their materials and equipment from physical loss or damage. In most cases it covers labor, materials and equipment used during the course of the construction project. Some policies even cover profit. It is important to know that Builder’s Risk Insurance does not provide liability coverage.
4. Take a Higher Deductible
If your Builder’s Risk Insurance policy requires high premiums, you may not be able to afford them. Ease your financial stress by contacting your insurance provider and ask them how you can change the ratio of premium and deductible. During the course of construction, paying high premiums can be a bit stressful. To keep the policy, you will always have to pay the premium. But if things go smoothly, you may never have to pay the deductible.
5. You Get What You Pay For
Your Builder’s Risk Insurance policy will typically only cost 1% to 5% of the total construction budget. It can (and must) also be customized to meet the needs of your construction business and the project. Protect your construction materials, HVAC equipment, scaffolding, signage, fencing and more.
Many factors may determine the cost of this policy. The location of the project and the construction materials are two important determining factors. If your project is not more than 50 miles away from the coast, the cost will be $200-$500 per $100,000. To save money, you can take a higher deductible.
Get the policy you really need from one of the largest online providers of Builder’s Risk Insurance. Give us a call at (855) 597-1921. We can help.
