What is Builder’s Risk Insurance for General Contractors?

So what is Builder’s Risk? Does Builder’s Risk insurance protect your general contractor business?  As a general contractor, you have genuine concerns about the various risks that might impact your project in the course of construction. Mistakes are costly. Risk mitigation takes many forms and having the right Builder’s Risk insurance is one of them.

Read on and find out the numerous benefits Builder’s Risk can afford your business.

What is Builder’s Risk? Do I need it?

Overhead costs can eat into your profit margin. If you already have a contractor liability cover you may wonder, “What is Builder’s Risk insurance? Does my business need it?” Builder’s Risk insurance is not another unnecessary overhead. This cover will partially or fully compensate you in case of loss or damages to a structure during construction under a stated set of circumstances.

Below are three reasons why Builder’s Risk will protect your business

1. Some project owners will refuse to work with you without this Builder’s Risk coverage. They need the assurance their property is protected
2. Your business will be compensated in case of losses. Some losses you may incur during construction and are generally covered by Builder’s Risk include losses due to fires, theft, explosions, and weather events such as hurricanes, lightning and hail.
3. Builder’s Risk may include compensation for lost earnings when a project overruns deadlines. This may mean compensation for lost sales or rental income. You may also be partially or fully compensated for real estate taxes and interest on loans depending on your policy.

With your Builder’s Risk cover, you have a guarantee the structure under construction, materials and equipment would be compensated for should anything go wrong.

What common risks do I face during construction as a general contractor?

1. Errors, omissions or last-minute changes in design that can impede construction progress.
2. Changes in local laws or tax requirements that alter the project cost.
3. Incomplete environmental analysis at project commencement. Additionally, new environmental protection guidelines or laws introduced in the course of the project dictating a change in some construction materials.
4. Internal company challenges such as under-skilled labor and high employee turnover.
5. Poor project management that may lead to scheduling conflicts with subcontractors or sub-par quality of work.
6. Right of way risks where temporary construction permits expire resulting in delays.

When selecting your cover, it’s a good idea to discuss any concerns with your insurance agent. Depending on your local area, you may find some factors pose a greater risk to you. Your Builder’s Risk cover should be adapted to adequately protect you.

Need more information on tailor-made Builder’s Risk insurance?

Builder’s Risk does not come in a “one size fits all” package. Each construction business has its set of unique circumstances to be considered in order to give suitable coverage. We are here to help you general contractor business select the tailor-made cover in any of the 50 states. Would you like to consult with us? Call us today on 888-676-0923.