Must Your Builder’s Risk Coverage Be Customized?

Most construction insurance companies offer Builder’s Risk at 1-5% of total costs. It’s a small investment for a huge amount of protection.  Furthermore, you probably have some form of third-party coverage already.  But was it made with your business in mind?

In this article, we’ll look at 5 different ways to customize your Builder’s Risk policy. As a result, we will show you how to get the most protection against your own particular risks.

Basic Builder’s Risk Coverage

First things first.  Before deciding what to add, it’s worth double-checking your policy includes the usual coverages. Builder’s Risk protects the structure, usually for 6, 12, or 18 months – it’s up to you. Most construction insurance companies will offer coverage for:

• Wind
• Rain or Hail
• Fire and Arson
• Theft
• Vandalism
• Lightning
• Vehicle Collision

That’s a lot of protection for contractors. Wind leads claims at 28%. Fire accounts for only 8%. However, it is among the most dangerous threats to construction sites due to the destruction fire wreaks – $300 million in 2017.

Customizing Your Basic Builder’s Risk Policy

1. Property In Transit 

There are around 6 million car accidents in the U.S.A. every year. The injury and loss of life are horrific.  But even smaller incidents can mean massive damage to your property. Construction insurance companies offer this extension to cover equipment you transport from one location to another. No matter how carefully you drive, driving always poses a risk.  Especially for contractors.

2. Temporary Structures

Most construction insurance companies will offer an extension that protects scaffolding and temporary structures.  Theft is particularly worrying. NCIB estimates $1 billion of equipment is stolen in construction every year. With big, darkened sites and high-cost gear, it makes sense. If you operate in an area prone to crime, and have expensive structures set up, a temporary structures extension is worthwhile.

3. Earthquakes

California and Texas employ the most construction workers of any state. They are both affected by earthquakes, with California’s sometimes surpassing a 6.0 magnitude. The 1994 Northridge quake caused $15.3 billion in damages. With loose materials and half-finished buildings, destruction inflicted on construction sites is extreme. If you work in an area at risk of tremors it’s not expensive to add an earthquake rider to your Builder’s Risk. And, it’ll save you a lot of anxiety.

   4.  Water Buildup

National rainfall has increased 90% since 1950. 2019 was the wettest year on record, with large parts of the Eastern interior receiving 30% more rain than average. This means more water lying in clogged drains. Water building up can be awful for a construction project. Imagine it leaking on the 30th floor and seeping down to lower floors. Adding a water build-up extension can be a lifesaver for your project.

5. Green Construction

Green Building is worth $11.9 globally, and is the biggest market is the US. More and more clients want to hire contractors who work green. Many construction insurance companies offer an extension that pays to recycle debris, purify air, and replace or repair renewable energy sources damaged by the covered causes of loss.

Tailoring a Policy For Construction Insurance Companies

The best extensions depend on how your business operates. You can make sure you have the most effective coverage by connecting with construction insurance companies who know exactly what you need. We are experts in Construction Insurance, so give Builder’s Risk a call on 887 960 0221 to get started.