builders risk coverage

Builder’s risk insurance, also known as course of construction insurance, is a specialized type of property insurance that helps protect buildings under construction. It’s essential in helping protect construction projects, but can be complex and often misunderstood. However, having a properly structured builder’s risk insurance policy can be crucial. In fact, it will serve as the backbone of a successful risk management program. Builder’s risk insurance helps protect construction projects from property damage due to: 

• Fire
• Lightning
• Hail
• Explosions
• Theft
• Vandalism
• Acts of God, like hurricanes

Any person or company with a financial interest in the construction project needs builder’s risk insurance. Some common people you may want to include on your policy as insureds include the: 

• Property owner
• General contractor
• Subcontractors
• Lender
• Architects

A basic builder’s risk insurance policy helps cover buildings and structures under construction. It also helps protect: 

• Materials
• Supplies
• Equipment on site, in transit or at other locations

A builder’s risk insurance policy helps protect your construction projects from certain kinds of property damage. It can also help cover additional soft costs, or expenses not directly related to construction, if property damage causes a delay. This can include: 

• Lost sales
• Rental income
• Additional interest on loans
• Real estate taxes

Because every construction project is unique, each builder’s risk policy is different. You can customize your policy to fit your project’s needs by getting coverage extensions. Common extensions include protection for: 

• Scaffolding
• Construction forms
• Temporary structures
• Debris removal and disposal in the event of a loss
• Pollutant cleanup

Be aware that builder’s risk insurance may have coverage exclusions. For example, earthquake, flood, wind or beach zones are usually excluded from coverage, but you may be able to get extensions to help protect projects vulnerable to these kinds of risks. Other builder’s risk insurance coverage exclusions include: 

• Wear and tear
• Acts of terrorism and war
• Employee theft
• Rust and corrosion
• Mechanical breakdowns
• Damage due to faulty design
• Planning
• Workmanship and materials
• Engineers

Do an inventory of all your project’s exposures at different phases of the project, including those at the construction site, in transit or at a temporary storage site. You may choose to get broad protection for property of all kinds at all locations or narrow your coverage to specific property and risks. Whatever level you choose, make sure you review your policy so there aren’t any coverage gaps. 

A builder’s risk insurance policy usually starts on the date when all the contracts get signed, but certain policy provisions may restrict when coverage begins for your project. So, make sure you understand what specifically triggers the start of coverage. 

Since it’s a temporary insurance policy, your builder’s risk coverage will likely end after your project’s completion. Your policy will tell you the specific conditions of when you have coverage until. It can end after the: 

• Policy expires or is cancelled
• Building becomes occupied
• Building put to its intended use

As a general rule, builder’s risk policies exclude the costs of repairing or correcting faulty work from a subcontractor. However, policies with an ensuing loss provision may cover the resulting damage to other property caused by the faulty work. Exclusionary provisions can vary widely. If your policy includes these types of provisions, make sure you understand the extent of coverage. Rancho Santa Fe Dallas Austin Builders Risk insurance quotes