Builder’s Risk Insurance is valuable coverage to have when you are embarking on a construction project. This can be a small home renovation or a multi-building development. It protects your investment from many of the things that go wrong in construction.
These are the 6 things every contractor needs to know.
Builder’s Risk Insurance is property coverage. It covers certain types of construction projects. Furthermore, they include the following:
Builder’s Risk coverage is tailored to the project concerned. Thus, this means there is no standard policy. Most policies include coverage for the costs of construction, namely labor costs, material costs and the equipment used. There are many loss events that are added depending on the risks facing your project. These could be:
Each policy is different but your exclusions should be clearly stated in the documentation. In some instances subcontractors excluded and will require their own insurance. Moreover, some policies exclude damage from earthquakes or hurricanes. If there is a risk pertinent to your project you can add it by endorsement. This will impact the cost of the policy but having the right coverage is very important. Not having the right coverage can be an expensive mistake.
Builder’s Risk is term insurance. It covers you while your project is in progress so it has a start and an end date. A policy is normally 3, 6 or 12 months. In the instance of a new building it should start when ground work commences. Once the building is ready for occupation, new property coverage required. If the building is taking longer than expected, a policy can usually be extended.
There are several factors that influence the cost of a policy. The value of the project is one of the biggest factors. A policy should be valued at 100% of the replacement cost of the building at completion. In general a policy will cost between 1 and 4% of this value. Thus, it is important to have the right coverage and not to simply get the cheapest one. The preferred insurance company, Builder’s Risk.net will negotiate on your behalf to get you the lowest rate for the right coverage.
Anyone that is undertaking a building project should strongly consider Builder’s Risk Insurance. A standard property insurance policy doesn’t protect you sufficiently when you are building. Hence, one policy can include all the participants in a project. For example, the project owner, contractor and lender can all be covered by one policy.
Speak with the preferred insurance company
Our agents are experts in the industry. We represent A-rated insurance carriers and will get you the right coverage for your project. Put us to the test! Call the preferred insurance company, Builder’s Risk.net at 877 960 0221.