Builder’s risk insurance, sometimes referred to as construction insurance, covers a contractor’s property, materials, and equipment related to a building or other construction project. It can be used to cover new structures being built from the ground up or the renovation of existing structures. The coverage typically continues until the building project is complete and the owner signs off on it.
There are no standardized policy forms for builder’s risk insurance because every construction project is different. As a result, this type of insurance is often misunderstood and deemed overly complex by contractors.
A builder’s risk policy assures that you won’t have to foot the bill for financial losses in the event of:
Damage to a Structure in Progress
Builders risk can help with teardown, cleanup, and restart of work should fire or vandalism damage or destroy work that has already completed on the insured project.
It is not uncommon for valuable tools, expensive copper wiring, or other materials, equipment, or supplies to be stolen from a project site. When assets go missing, builder’s risk can help cover the losses.
Damage from Weather Events
Builder’s risk helps cover losses from damages to structures, materials, and supplies caused by hailstorms, windstorms, and rainstorms during a build. This policy helps with costs for cleanup and repair following a non-severe weather event that may damage the insured project.
Builders risk is a comprehensive insurance policy that covers all of the parties involved in a project, including:
- general contractor
- property owner or developer
- banks funding construction
If an unexpected accident happens during construction, each of these parties could face a significant financial loss. Insuring everyone under the same policy covers everyone’s interests and helps ensure there are minimal disputes or finger-pointing along the way.
Builder’s risk insurance is an essential coverage for any construction or large renovation project. It’s typically the responsibility of the general contractor or the owner/developer to purchase a policy that will cover any potential losses for all who have a vested interest in the project. Have questions regarding builder’s risk insurance? Give Kamm Insurance Group a call or request a quote on our website!