When embarking on any construction project, whether it’s a new building or a renovation, there’s a substantial amount of planning, coordination and investment involved. Amid all this, the last thing you want is unexpected setbacks or financial losses due to unforeseen circumstances. Builders risk insurance is essential to help safeguard your construction project against various risks and potential disasters.
What Is Builders Risk Insurance?
Builders risk insurance is a type of property insurance that helps financially cover buildings under construction. This insurance can typically be tailored to your needs because each construction business and project has unique risks. Builders risk insurance can be essential for covering construction projects; without it, your business may have to pay for costly incidents out of pocket, which could derail the project. An incident without insurance may also affect your company’s reputation and your ability to book future projects.
What Does Builders Risk Insurance Cover?
Builders risk insurance can help financially protect construction projects after property damage at the site. Depending on the policy, covered perils may include:
- Fire
- Lightning
- Hail
- Explosions
- Theft
- Vandalism
Some policies may also cover construction materials in off-site storage or in transit. Depending on the insurer, other available policy extensions may include protections for the following:
- Scaffolding
- Construction documents
- Pollutant cleanup
- Temporary structures
- Costs associated with construction delays
- Debris disposal and removal in the event of a loss
- What Is Excluded From Builders Risk Insurance?
- It’s important to note that builders risk insurance typically does not cover certain items and risks, which may include:
- Earthquake and flood damage (unless specifically added to the policy)
- Normal wear and tear
- Intentional damage or negligence
- Damage resulting from faulty design, technique or materials
- Costs incurred due to construction delays that are not the result of a covered loss
Who Needs Builders Risk Insurance?
Builders risk insurance is essential for any party with a financial interest in a property under construction or renovation. This could include the building owners, architects, engineers, lenders, contractors and subcontractors. Depending on the project and its contract, the general contractor or property owner may be responsible for securing the builders risk policy, and they may include others (e.g., subcontractors) in the policy. Contact Ed Weeren Insurance Agency to discuss your insurance needs. We can help recommend coverage for your specific operations.
This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.