Builder’s Risk Insurance 101
Builder’s risk insurance doesn’t have to be complicated. To help you better understand the coverage so that you can select the right policy, we’ve compiled the basic information about this essential construction insurance policy. Make sure you can protect your next project quickly and easily with these tips!
What is it?
Simply put, builder’s risk insurance insures a structure while it is under construction. It can cover ground-up projects, such as residential or commercial construction, as well as remodeling or tenant improvement projects. This policy also helps to protect the insured against physical and/or financial loss. Construction projects present unique situations and exposures which increase the possibility of physical loss or damage to the structure.
What does it cover?
Builder’s risk insurance covers material and labor costs associated with the construction or remodel of a home or building. Construction materials such as lumber, drywall, plumbing, lighting fixtures, HVAC units, and other materials are all prone to damage or loss during construction. The cost and time to repair or replace these items can significantly delay or even terminate a project.
Builder’s risk insurance offers coverage for:
- Property damage (construction material, fencing, scaffolding, etc.)
- Theft, natural, and man-made disasters (lighting, explosions, fire, etc.)
- Soft costs (architects/engineer fees, interest, insurance costs)
Who needs it?
The impact of accidental and unpredictable events can be disastrous to your construction project. Builder’s risk insurance is designed to get the construction project resumed quickly by providing the finances to replace lost or damaged covered property. This means that you have protection for your project’s bottom line.