Builder’s Risk Insurance is an important way of making sure your project is profitable. Many things can go wrong during construction. Builder’s Risk covers many of these risks. It means that you don’t pay out your own pocket after a loss.
From a regulatory point of view this insurance is not mandatory. That doesn’t mean you don’t have to have it, however. Many clients will insist that you do. It makes sense. If something goes wrong your client wants reassurance that you will be able to continue with the project. They don’t want a situation where your company goes out of business, and they have to find someone else to complete it. Of course you also don’t want your company to close because you can’t afford to continue.
Contractors Liability Insurance covers you if you are sued for causing damage to the property of another and/or causing bodily injury. It assists you with the cost of your legal defence and the cost of a settlement. It is essential for your business as a lawsuit can be the ruin of your business. It will not protect you from many of the risks you experience in construction, however. You need additional coverage to protect you from these risks.
Builder’s Risk Insurance is specific to a project. You get a policy to cover you for the duration of construction. For this reason it is also known as Course of Construction Insurance. Your policy should start when you are ready to break ground, if you are building a new building. If you are working on a renovation or refurbishment of an existing building, it should start when you begin work.
This insurance covers you for many loss events. A policy should be tailored for your specific project but will generally protect you in the event of fire, theft, vandalism and adverse weather events. It is property replacement coverage and will assist for the replacement of the damaged property, tools, equipment and materials.
Typically a policy covers the entire project and all of its participants. In other words each party does not need to have their own Builder’s Risk coverage; one policy will provide coverage for all as named insured. The project owner, developer, contractor, architect and lender can all be included, for example. It is important to check that there are no exclusions. In some policies sub-contractors could be excluded and they will then require their own coverage.
There are many unknowns on a construction project. Limiting your exposure to risk is important as when things go wrong they eat into your profits. Speak with us at Builder’s Risk.net. We will tailor a policy for your needs so you have the protection you need. Call Builder’s Risk at 877 960 0221.