Builders Risk Insurance

Liability Insurance

Builders Risk Insurance

Also referred to as construction insurance. It is a type of insurance that covers building projects while they are under construction phase. It also helps protect materials, supplies, equipment on site, in transit or at other locations. Builder’s risk policy protects soft costs, related to the overall budget. These include lost sales, real estate taxes and rental income at an additional cost. It is important for any construction project because it indemnifies against damage that could cause a project to grind to a halt.

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Coverage of Builders Risk Insurance

Builder’s risk insurance helps protect construction projects from property damage due to Fire, Lightning, Theft, Vandalism. It may have coverage exclusions such as floods, earth quake, hurricane etc unless the policy has been endorsed to do so.

Cost of Builders Risk Insurance

Builders risk insurance varies depending on what you need. It is based on the budget, location, duration, and size of the project. Generally the policy will be in the range of one to four percent of the construction cost.

Who buys Builders Risk Insurance?

  • General Contractor/ Sub-contractor
  • Property Owner
  • Architect
  • Material Suppliers

Builders risk insurance exclusions

It is important to note builder’s risk insurance exclusions. However, the insurer can extend the coverage to protect the property against risks which include

  • Wear and tear
  • Acts of terrorism and war
  • Employee theft
  • Rust and corrosion

Work with an a commercial insurance broker or agent to help you choose the right amount and type of coverage you need without having any gaps.

Builders risk insurance is vital especially if you will be working with materials prone to damage. It will cover your project against unforeseen risks.

What property is covered?

Property extensions include but not limited to temporary structures, scaffolding, and constructions forms.


Know When your Cover Begins & Ends

The policy should start once the policy has been signed. However it is always wise to confirm in case the policy has certain restrictions. Likewise get to know when the policy ends. It could be once the building is finished, occupied or expiry of insurance.

Builder’s Risk Insurance Covers

Residential insurance policy covers

  • Building -The building structure, building materials and equipment.
  • General liability- Protects against work related injury and damage.
  • Equipment breakdown- provides cover for damaged equipment as well as mechanical breakdown.
  • Important Papers and Electronic data- Building projects require blue-prints and prints which can get lost, stolen or damaged. Builders risk Insurance provides compensation or restoration of the paperwork.

The bottom line is that every building project is unique. Customize your policy to fit your needs.

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