How to get Builder’s Risk Insurance

Oct. 4, 2021

Course of construction, more commonly known as a builder’s risk policy, is an insurance policy protecting the materials and equipment that will be permanently installed at a new construction or renovation. Should something happen on your job site, having this policy on hand is the best way to make sure that the general contractor, the business owner, the property owner, and any other invested parties are covered from losses. The business owner or client will often require builder’s risk as a safety precaution, so be sure to account for this insurance policy within your construction budget.

It’s easy to see why this is an important coverage type, if you think about it from the perspective of the business owner. Thinking from their perspective will also help better understand the policy language and obtain the best insurance policy possible. In your construction contract, there should be information about the required types of insurances as well as any additional insured that should be on them.

For the most part, this section will be all you need to obtain construction insurance and start the job. In other cases, the insurance company can walk you through the process by hand. However, there are times when you will need help getting a builder’s risk insurance policy. Today, we are giving you five steps to ensure that you get there on time and budget.

1. Find a Provider: If you don’t already have an insurance company to go to, this is the time to find one. When looking for a new provider, whether for builder’s risk or not, you should always check with your network for recommendations as well as the internet for reviews. Whomever you choose should have a record of favorable claims history with sound and consistent underwriting. This type of insurance company will give you an excellent policy and partnership.
2. Choose When to Buy: Buy a builder’s risk insurance policy before anything happens on your job site. This method will allow you to be the most protected from contract start to finish.
3. Determining Your Project Value: When you look to buy an insurance policy, you will need to know the coverage amount you want. A simple way to do this is to take the construction project’s total insurable interest, or contract amount, minus the land cost. An insurance company should have an agent that can help you further.
4. Obtain the Right Policy: Your policy will have one of three significant layouts, a new construction, remodel, or installation. These will determine most of the major details of your plan. However, you’ll need to think about the risks that your site will face. Each of these could be a cause of loss, and you will need to make sure you are insured. Some examples are fire, wind, and theft.
5. Secure a Quote: Once you have all the information from above, use a builder’s risk application to get quotes from insurance companies. Submitting the application will tell you what you can expect to pay as well as what is included and excluded in your policy.