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The impact of Coronavirus on Builder’s Risk Insurance is felt by business owners. Depending on the wording of the policy it may no longer be providing the coverage you expect. Therefore, is it time to reassess your coverage? Let’s look at types of impact the pandemic could have on a policy and what you should do.
What is the impact of Coronavirus on Builder’s Risk Insurance?
Builder’s Risk Insurance, as specialized insurance, it applies to certain types of construction projects namely the construction of new buildings and the renovation of existing ones. Hence, it should be tailored to the needs of the project in question. Builder’s Risk provides coverage for specific loss events and it also has a term limit.
These characteristics impact a Builder’s Risk Insurance policy:
- Value of the Policy. The insurable value of a Builder’s Risk policy must be 100% of the replacement cost of the building at completion. The delay in the project could result in additional labor costs. Supply issues may also drive up the cost of materials. Furthermore, this would mean the project is under-insured and could be liable for a co-insurance payment in the event of a claim.
- Cessation of Building. Most policies contain some wording around the abandonment of a project or the cessation of work for an extended period of time. It is important to advise your insurance carrier that there is intent to proceed with the work. A policy also has a term limit with an end date. As a result, you may need to extend the policy.
- Safety Requirements. A policy may specify that certain things be in place for the securing of a site. Common examples of these are the employment of a security guard, lighting of the site and perimeter fencing. A security guard may not be possible at this time, and there could also be other challenges such as costs. As a result, the site will be vacant at this time, and it is at risk. The condition will not meet the policy if theft occurs. This could impact a claim.
- Exclusions: Builder’s Risk Insurance tends to be specific. It is tailored to a particular project for a specific client. Furthermore, it lists the loss events that it covers and it may have some exclusions. Although exclusions due to pandemics are not common, there could be one in a policy.
What to do about the impact of Coronavirus on Builder’s Risk insurance
The most important thing to do is to review your policy and examine the actual wording contained therein. Moreover, it is a good idea to do this with your agent or carrier. There may be additional information that they require, or they may request specific documentation and record keeping. With this intention, communication at this time is key.
Speak with Builder’s Risk.net about the impact of Coronavirus on Builder’s Risk Insurance
Our agents are available to answer all your questions. Moreover, we can review your policy with you and advise you accordingly. Call Builder’s Risk at 877 960 0221.
