Numerous risks are associated with operating a construction company, but they can be mitigated by having adequate insurance coverage. One policy you should consider is builders risk insurance.
What Is Builders Risk Insurance?
Builders risk insurance is a specific type of property insurance that helps cover buildings under construction. Builders risk insurance typically can be tailored to your needs because each construction project has unique risks. 
What Does Builders Risk Insurance Cover?
Builders risk insurance can help financially protect construction projects from property damage at the site caused by the following:
- Fire
- Lightning
- Hail
- Hurricanes
- Explosions
- Theft
- Vandalism
Some builders risk insurance policies may also cover construction materials in storage offsite or in transit. Common extensions include protections for the following:
- Scaffolding
- Construction documents
- Temporary structures
- “Soft costs” associated with construction delays
- Debris removal and disposal in the event of a loss
- Pollutant cleanup
What Is Excluded From Builders Risk Insurance?
Some losses that may be excluded from a builders risk insurance policy include the following:
- Employee theft
- Work vehicles
- Damage from earthquakes and flooding
- Manufacturing defects or flaws in quality or design
- Ordinary wear and tear
- Acts of terrorism and war
- Mechanical breakdown
- Sewer backup
Builders risk insurance also generally excludes any damage that occurs after a project is complete. Once the project is finished, the building’s owner should consider obtaining adequate insurance (e.g., business property insurance) to help cover potential losses.
Who Needs Builders Risk Insurance?
Builders risk insurance is essential coverage for any party with a financial interest in a property under construction or being renovated. 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. Reach out to your agent for details.
Why Is Builders Risk Insurance Important for Construction Projects?
Builders risk insurance is essential for covering construction projects. Without it, your business would have to pay for costly incidents out of pocket, which could completely derail the project. An incident without insurance may also affect your company’s reputation and your ability to book future projects.
Builders Risk Insurance in Austin
If you need builders risk insurance in the Austin area, contact Ed Weeren Insurance Agency. We can help you get the coverage you need to approach projects with confidence.
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.