Choosing the right insurance to cover your construction project is never an easy task. With so many policies to choose from, it can quickly become an overwhelming and frustrating experience.
In this article, you will find out why it pays to invest in Builder’s Risk insurance, also known as Course of Construction insurance and why it plays such a vital role in minimizing your risks.
Specifically designed to provide coverage for the construction needs of residential and commercial customers, this policy forms the core of your risk management program.
Construction is a risky business at the best of times and having the correct coverage in place to see to all those unplanned mishaps makes good business sense.
Generally, the most common types of construction projects covered include:
Don’t forget, if you have a unique build, your best course of action would be to speak to one of our agents at Farmer Brown Insurance.
Traditionally the owner of the project would secure Builder’s Risk insurance. The custom builder, general contractor, sub-contractor, architect, and lender funding the construction works; in fact, anyone with a vested financial interest in the project should also obtain this insurance.
Note: A Builder’s Risk policy may be necessary to show proof of insurance to comply with local city, county, and state building codes and is often a condition attached to contracts.
Builder’s Risk insurance provides coverage for buildings and other structures while construction takes place. Usually, you will be offered coverage for property damage relating to:
The most basic Builder’s Risk insurance offers coverage for project damage resulting from:
If, for example, your build is in an area known for flooding, the onus would be on you to obtain this additional coverage. It will be in your best interest to discuss this matter with one of our agents about what events you want coverage for.
Builder’s Risk policies do come with several limitations, and it is essential you are aware of them.
Premiums typically range from 1% to 4% of the construction spend, so the cost will correspond to how much protection you require. Other items that will influence your insurance spend are:
As a Builder’s Risk policy is specifically tailored to your project needs, it would be well worth your while investigating the benefit of adding soft cost coverage. This makes up for the loss of rental income, sales revenue, real estate taxes, and higher interest loans.
Unlike many other insurances, the policy can be purchased in terms of 3, 6, or 12 months and allows for one extension if required.
At Builders Risk Insurance company, we take the sting out of your property damage insurance requirements. Call Builders Risk at (877) 960-0221 where one of our agents is standing by to assist you.