Best Small Business Owners Guide to Builder’s Risk Insurance
August 19, 2020
I’m Not the Contractor, Why Do I Need A Builders’ Risk Policy?
August 24, 2020
If you’re not familiar with Builder’s Risk Insurance, a type of small contractor business insurance, you may be questioning its purpose if your client’s Homeowners insurance policy is already in place.
So, what is the difference between the two? In a nutshell, Homeowners insurance covers an existing residence while Builder’s Risk insurance protects a home under construction or renovation. Your client’s Homeowners coverage will not protect their home during the course of construction.
Builder’s Risk insurance coverage
Builder’s Risk insurance for your small contractor business protects buildings and structures while they are in the process of being built. It also covers other types of property, including building materials, tools and equipment, fixtures, foundation, fencing, and landscaping (e.g., lawn, trees, and paved areas).
The building materials and equipment covered can either be on the construction site, in storage at a different location, or in transit.
The coverage typically protects your construction or renovation project from property damage resulting from, but not limited to, theft, vandalism, fire, and weather. However, natural disasters, such as windstorms, earthquakes, and floods, are often not included in the policy.
Also offered under Builder’s Risk insurance is soft costs coverage, which helps cover expenses incurred if your project is delayed. By adding on to your policy you can cover your business for project delays such as the COVID 19 restrictions that were imposed on many businesses.
Homeowners insurance coverage
Homeowners insurance, like Builder’s Risk, is a form of property insurance that protects you from financial losses in the event of damage to the building under construction. The policy typically includes:
- Dwelling coverage: This helps pay for the rebuilding and repairing of the home, as a result of damage caused by fire, wind, hail, and lightning. Damage from floods or earthquakes is usually excluded from a standard Homeowners insurance policy.
- Structure coverage: provides insurance coverage for other structures on the premises such as a detached garage, tool shed, swimming pool, and fencing.
- Personal Property coverage: protects your client’s items, such as furniture, clothing, and electronics.
- Loss of Use coverage: reimburses for additional living expenses incurred, up to policy limits, if a covered loss makes the home temporarily uninhabitable while being repaired or rebuilt.
- Personal Liability coverage: this protects you against legal claims. It can help pay your attorney fees, damages if held liable, and medical costs should a person be injured.
Find out more about small contractor business insurance
At Builder’s Risk Insurance company, we help you find insurance for your small contractor business and advise on the correct coverage that best suits your needs and budget. Save time and money by talking to one of our agents today at 877 960 0221. We get quotes from leading insurance carriers.
