Builder's risk insurance, also known as course of construction insurance, is a type of property insurance that helps protect buildings that are under construction.

Builder's risk insurance helps to protect construction projects from property damage due to:

• Acts of God, such as hurricanes and wind storms,
• Explosions,
• Fires,
• Hail,
• Lightning,
• Theft, and
• Vandalism.

Any person or company with a financial interest in a construction project needs builder's risk insurance. The following people are included:

• Architect, if any;
• Engineer, if any;
• General contractor;
• Lender, if any;
• Property owner; and
• Subcontractors.

Builder's risk insurance polices help cover buildings and structures under construction plus:

• Equipment on site, in transit or at either Iocations,
• Materials, and
• Supplies.

A builder's risk insurance policy helps protect 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 cap include:

• Additional interest on leans,
• Lost sales,
• Real estate taxes, and
• Rental income.

Since every construction project is unique, every builder's risk policy is slightly different.

Common extensions or modifications include protection for:

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

Builder's risk insurance policies 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 types of risks.

Other builder's risk insurance coverage exclusions may include:

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

A builder's risk insurance policy usually starts on the date when all contracts get signed, but certain policy provisions may restrict when coverage begins for a project.

Since builder's risk insurance is a temporary insurance policy. coverage will likely end after the project's completion. The policy will set forth when you have coverage. It can end after the:

• Building becomes occupied,
• The building is put to its intended use, or
• The policy expires or is cancelled.

Generally, 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.

Before you sign a contract, read through the entire policy. Be sure to double check all coverages, conditions for coverage, and exclusions. You'll want to make sure you know what is and isn't covered. If you find a coverage gap, work with your agent or broker to address it.

Most insurers write builder's risk insurance policies on an inland marine form rather than a standard property insurance form. This allows for broader coverage that's tailored to the needs of each construction project. That's why it's important to select an experienced marine insurance carrier.

 

 

Inland Marine Insurance

Contractors Bonds - Construction Bonds