Builder’s risk insurance refers to a special kind of property insurance policy that protects against damage to buildings while the buildings are under construction. It can protect an organization’s or a person’s interest in fixtures, equipment being used in the construction process, and materials in the event of loss or damage.
As any construction worker or construction company owner can attest, buildings are faced with many different risks throughout the construction process. They could be damaged by high winds or catch fire, and these are just a handful of the risks that can halt or destroy a building’s progress. A builder’s risk insurance policy is a wise purchase to help protect against perils like vandalism, theft, wind, fire and others. It’s important to know that your policy will list “covered causes”, and a general policy is not likely to cover losses due to floods in beach zones or earthquakes. If you have specific needs for a builder’s risk policy, consult with an insurance policy to discuss the way best to mitigate those risks.
In many cases, you can insure additional risks by getting further coverage in your builder’s risk policy.
Builder’s risk can be a good fit for:
- Construction site managers
- Design/build firms
- General contractors
- Highway contractors
- Civil contractors
- Specialty trade contractors
In many different locations, builder’s risk insurance is required in order to comply with local or state regulations. Many contracts also require builder’s risk insurance. Policies can typically be written in several different periods like three months, six months, and 12 months. A builder’s risk policy should be aligned with the construction budget in order to obtain the right amount of coverage. In the event of damages or loss, that policy will cover damages up to the official coverage limit. This can be a great source of peace of mind but also a valuable protection in the event that a loss or damage occurs.
A loss or damage can be devastating for a building project. It can halt an ongoing construction project and present sudden damage costs that were not factored into the original budget. If the damage is serious enough, a construction company’s entire business may be at risk. While a general builder’s risk policy can be a wise investment, you need to also fully evaluate the possible risks associated with an upcoming project to determine what kind of supplemental coverages may be beneficial.
If you are involved in a building project, you need builder’s risk insurance in place to help protect your interests and your business. Contact a professional today to get a quote for the builder’s risk policy you need.