Builder's Risk Insurance
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What is Builder’s risk insurance?
Builder’s risk insurance covers your building project from covered losses such as fire, severe weather, or theft while under construction, prior to the certificate of occupancy. Builder’s risk may also cover the cost of cleanup and clearing away debris and the loss of rental income, and cost associated with delayed completion of the construction.
What Does Builder’s Risk Cover?
When you have a Builder’s Risk policy covering your construction project, you’re covered against losses which may include:
- Theft of tools and equipment onsite.
- Fire damage to a structure in progress.
- Structural damage due to weather events.
- Vandalism to a structure in progress.
- Delayed Completion.
PLEASE NOTE: Builders Risk Policies are not standardized, so coverage varies from carrier to carrier. Always read the policy before purchasing coverage.
The following optional coverage can be added to most policies to meet the needs of the contractor:
- Installation floater, this covers uninstalled materials and equipment, while in storage, or transit, or the job site.
- Premise liability should a person become injured while on the site (this excludes employees, subcontractors and their employees).
- Delayed completion of the project.
- Loss of rental income, or other costs associated with the delay in the completion of construction.
- Office trailers.
When Do You Need Builder's Risk Insurance?
- If you are performing new residential or commercial construction and major remodels.
- In today’s environment a Builders Risk policy is essential to protect your company for the cost of theft or damage to property can strike at any time.
Builder's Risk Insurance Policy Coverage
What is covered?
- The structure is covered for fire or theft of installed materials
- In addition to providing coverage on property at the construction site, most builders risk policies provide coverage on the building site, in transit and in temporary storage away from the construction site
What is not covered?
- Contractors’ tools and equipment, are usually excluded from coverage. Coverage for this type of property is available to the contractor under a contractor’s equipment policy.
- However, some builders risk forms specifically exclude employee theft, dishonesty, or mysterious disappearances or shortages that are found when taking inventory. This exclusion is intended to prevent coverage for property that may have been misplaced, rather than stolen.
- Loss caused by wear and tear, or site conditions (fungus, wet or dry rot, bacteria and asbestos.) Be sure to read the coverage exclusions to the policy prior to purchasing.
- Flood and earth movement is excluded from most builders risk policies, but may be endorsed to the policy as needed.
- Settling, cracking and expansion of foundations, pavements, floors, ceilings, or roofs is excluded from most builders risk policies.