Builders Risk Insurance

Key Reasons to Have Builders Risk Insurance

Why You Need to Invest in Builders Risk Insurance

Your commercial construction or residential project is considered under construction from the moment the materials are delivered to the job site until you have received your Certificate of Occupancy.  During the course of construction, buildings are vulnerable to many types of risks that are often out of our control.  Hurricanes, tornadoes, floods, and fire are all events that could potentially pose a risk to your construction project.  Builders risk is insurance coverage that is designed to protect buildings under renovation or construction and the equipment and materials that are used on site.  Obtaining builders risk insurance protects against loss during the construction period.

What is Covered Under Builders Risk?

There is a lot of time and money that goes into the planning process when renovating or constructing a new building.  No one can typically predict a catastrophic event, therefore, it is worth protecting your investment.  In the event that something serious happens, builder risks insurance will protect you in many ways.  Builders risk coverage can include items such as construction materials, foundations, theft,  heating and cooling equipment, electrical wiring, profits and labor costs, temporary structures, fencing, and landscaping.

There are several coverage options for builders risk.  Just like most insurances, you can purchase a standard policy or you can purchase additional coverage and riders.  The cost of builders risk depends on the value of your construction project.

Who is Responsible to Obtain Builders Risk?

Builders risk can be covered by your contractor or by the property owner depending on your contract terms.  If you are renovating or adding to an existing building builders risk doesn’t cover the existing building, however, your property insurance most likely will.  Therefore, it might be in the best interest of the property owner to obtain the builders risk policy.  It is essential for subcontractors to carry their own insurance, as builders risk doesn’t cover items like tools, personal property, or accidents.  If you are acting as your own general contractor be sure to request a copy of your subcontractor’s certificate of insurance.  They should have at the very least liability, automobile, and worker’s compensation coverage.  If you have hired a general contractor for your construction project be sure to ask what their policy is for obtaining proof of insurance from subcontractors.

Builders risk insurance ends once your commercial construction or residential project is complete and you can take occupancy.  Contact your insurance provider for additional policy information and costs.

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