What is Builder's Risk Insurance?
A property insurance policy that is designed to cover property in the course of construction.
Who Needs Builder's Risk Insurance?
The owner(s) or contractor(s) involved in a building or construction project.
What Does Builder’s Risk Insurance Cover?
- Fire damage to structures in progress. If a fire burns down your work, Builder's Risk Insurance can cover the cost to repair the structure or tear it down and start from scratch.
- Onsite tool and equipment theft. Construction sites are frequent targets for thieves. Crooks can steal copper wire and tools, making off with thousands of dollars of your business property. Builder's Risk Insurance reimburses your business for losses from theft.
- Vandalized structures in progress. There are some things you just can't predict. If some teenagers decide to wreak havoc at your construction site, Builder's Insurance can cover the damages.
- Structural damage from weather events. Your policy can cover structural damage caused by rainstorms, windstorms, and non-severe weather events. However, damages caused by natural disasters are not covered. If you need coverage for hurricanes, earthquakes, or floods, talk with a Builders’ Choice agent about adding on the appropriate endorsements.
How Does Builder's Risk Insurance Work?
Contractors and construction professionals benefit from Builder's Risk Insurance in three ways:
- It protects your investments and offers financial security. In the construction industry, you often have to pay for building materials. Sometimes, you can't recoup that expense until you finish the job. That means you're financially vulnerable if something happens during construction. Builder's Risk Insurance protects your investments by reimbursing you for losses or damages to your property before a project is finished.
- It protects your business equipment. As the old saying goes, you need the right tools for the job. If thieves steal your tools from a jobsite, you could lose thousands of dollars and be forced to get by with substandard gear if you can't purchase all the necessary replacements. If you have Builder's Risk Insurance, your provider can pay to replace stolen tools, which allows you to work at full strength.
- It gives you a backup plan. As you know, when you're working on a construction project, things sometimes don't go according to plan. That's the nature of contracting work. While you might be able to work around problems with staff, a wrong order, or other construction issues, Builder's Risk Insurance protects you from the things you can't plan for. For example, a sudden windstorm could ruin a month's worth of work. Builder's Risk Insurance makes sure you can recoup losses when these unpredictable hazards strike.
Builder's Risk Insurance is crucial for contractors who work on long projects. Unlike other insurance policies, this coverage protects your unfinished structures and your equipment when it's on client property.
What Happens if Your Tools, Equipment and Materials are Lost or Damaged While On Someone Else's Property?
A Builder's Risk policy can cover property on site, off site, and in transit. Typical Property Insurance coverage is only in force on while the supplies are at your business's primary location.
What Happens If You're in the Middle of Building an Expansion on a Home and a Fire Burns it Down Before You're Done?
A Builder's Risk policy covers these unique exposures. Typical Property Insurance doesn't cover damages to construction projects in progress.
Whether you're building a new home or adding a 1000 square feet to a garage, the materials and time that go into a construction project are a huge investment. Builder's Risk Insurance covers your construction work until it's finished and sold to the client.
Still have questions? Talk to a Builders’ Choice agent about the specific needs of the project(s) you're working on!