Does Builder’s Risk Insurance Provide Disaster Coverage For General Contractors?

We all know that disaster coverage for General Contractors is necessary for your business but, is it included with your Builder’s Risk Insurance? The short answer is that Builders Risk by definition is only property coverage. But what does this mean?

General Contractors are often left confused by insurance and whether their policy protects against natural disasters. Since 34% of all insurance costs in 2018 were as a result of wildfires, droughts, and heatwaves, being sufficiently insured is crucial. 

What will your Builder’s Risk policy cover, and why is disaster coverage for General Contractors necessary? In this guide, we will explain Builder’s Risk Insurance for General Contractors with particular reference to natural disasters. 

Builder’s Risk Insurance And Natural Disasters

Your Builder’s Risk Insurance policy protects a building while being renovated or under construction. Equipment and materials stored onsite are protected too. 

This type of insurance protects your business against elements out of your control. However, natural disasters are often regarded as ‘Acts of God’. These are not covered with Builder’s Risk. Unless additional coverage has been purchased, a Builder’s Risk Insurance policy won’t cover the following:

1. Flooding
2. Volcanic Eruption
3. Tornadoes
4. Hurricanes
5. Earthquakes

However, your Builder’s Risk Insurance will help cover losses associated with the aftermath of these disasters.

Builder’s Risk Insurance For General Contractors 

Damage caused by ‘minor’ weather conditions (such as hail, windstorms, and lightning) can be protected under your Builder’s Risk Insurance policy.  There’s a fine line between minor weather conditions and major incidents. In some cases, additional natural Disaster Coverage for General Contractors will be required. 

For example, you’re building on a floodplain. There is an increased risk of flooding. Additional coverage is necessary to cover the damages caused by the flood.

You should also take note that many policies in coastal and tornado states do not cover for wind and hail, or there is a special % deductible for any claim resulting from these types of losses. The best plan is to talk to insurance agents that specialize in Builder’s Risk Insurance.

Debris Clear-Up

Windstorms and wildfires can weaken the integrity of a building under construction. As a result, it can be left in ruins. Debris from the building site must be removed and cleared away before any repairs take place. Potentially, you face removal costs of tens of thousands of dollars. And that’s before any repairs are carried out. What’s more, depending on the scale of the disaster and the size of the building, costs can increase. Builder’s Risk for General Contractors will pay the cost to remove debris from the worksite.

Pollutant Cleanups

Contamination is likely after a natural disaster. If this happens, you aren’t able to work on the land until it’s free-from pollutants and decontaminated. Pollutants can be caused by a variety of factors, including:

1. Chemical Spills
2. Paints
3. Asbestos Insulation
4. Pesticides 
5. Lead Batteries 

Often, specialized cleanup is required. And that’s very expensive. The last thing you need is to worry about being left out-of-pocket. And while major disasters like tornadoes won’t be covered, your Builder’s Risk policy may still be insured for the cleanup costs related to them. 

The Loss Of Electronic Data Onsite

You rely on schematics and blueprints to do your job. And it’s more likely they’re stored on the job site. If they’re lost or damaged, the delay can cost your business dearly. For example, a lightning storm strikes and starts a fire on site. All electronic data is lost. You not only have to deal with the impact of the fire, but the recovery of blueprints and other documents. Having Disaster Coverage for General Contractors will cover any loss incurred. 

Disaster Coverage for General Contractors 

As extreme weather becomes more frequent, naturally insurance becomes more necessary. Builder’s Risk Insurance covers the cost of helping you deal with the aftermath of these disasters. Let us help you find insurance suitable for your business. Call Builder’s Risk Insurance today to get a free quote. We can help. Contact 877 960 0221.