Builders Risk Insurance
Also referred to as construction insurance, Builders Risk Insurance is a type of insurance that covers building projects while they are under the construction phase. This type of insurance covers damage to the structure during the construction process, including loss due to fire, theft, vandalism, and weather. It can also cover the cost of architects and engineers if the plans need to be revised due to damage. Builders risk insurance is typically purchased by the home builder and then transferred to the homeowner when the home is completed. It is important for any construction project because it indemnifies against damage that could cause a project to grind to a halt. Get a commercial insurance quote for your construction now.
Coverage of Builders Risk Insurance
Builder’s risk insurance helps protect construction projects from property damage due to Fire, Lightning, Theft, Vandalism. It may have coverage exclusions such as floods, earth quake, hurricane etc unless the policy has been endorsed to do so.
Cost of Builders Risk Insurance
Construction insurance varies depending on what you need. It is based on the budget, location, duration, and size of the project. Generally the policy will be in the range of one to four percent of the construction cost.
Who buys Builders Risk Insurance?
- General Contractor/ Sub-contractor
- Property Owner
- Architect
- Material Suppliers
Builders risk insurance exclusions
It is important to note builder’s risk insurance exclusions. However, the insurer can extend the coverage to protect the property against risks which include
- Wear and tear
- Acts of terrorism and war
- Employee theft
- Rust and corrosion
Work with an a commercial insurance broker or agent to help you choose the right amount and type of coverage you need without having any gaps.
Construction insurance is vital especially if you will be working with materials prone to damage. It will cover your project against unforeseen risks.
What property is covered?
Property extensions include but not limited to temporary structures, scaffolding, and constructions forms.
Know When your Cover Begins & Ends
The policy should start once the policy has been signed. However it is always wise to confirm in case the policy has certain restrictions. Likewise get to know when the policy ends. It could be once the building is finished, occupied or expiry of insurance.
Builder’s Risk Insurance Covers
Residential insurance policy covers
- Building -The building structure, building materials and equipment.
- General liability- Protects against work related injury and damage.
- Equipment breakdown- provides cover for damaged equipment as well as mechanical breakdown.
- Important Papers and Electronic data- Building projects require blue-prints and prints which can get lost, stolen or damaged. Construction Insurance provides compensation or restoration of the paperwork.
The bottom line is that every building project is unique. Customize your policy to fit your needs.