Must-Have Coverage for Every Builder
A Builders Risk policy covers your financial interests during the course of a construction project. The policy covers property such as building materials from the time they are delivered to the site until the structure is sold or other insurance coverage, such as a homeowner's policy, is in place. Most Builders Risk policies also provide coverage for theft of building materials, materials in transit or at temporary locations, certain landscaping and much more.
Why Do I Need Builder's Risk?
As a Builder you need Builders Risk policy to protect your financial investment in the construction project you are building-Home, Strip Mall, townhome or Commercial Project.
This is not a coverage that is provided to you in your General Liability Policy.
FAQs of Builder's Risk
When does coverage begin?
Once a Builders Risk insurance policy is issued, coverage begins when you become legally responsible for the covered property on or after the effective date of the policy. As soon as materials are delivered to the job site, your builders risk policy starts protecting you. You should obtain a Builders Risk policy prior to beginning construction to ensure that your project is properly covered.
How much coverage is needed?
You should obtain builders risk coverage for the total estimated complete value of the project. In general, this amount is the selling price of the home or building minus the cost of the land. Builders can also opt to include a reasonable profit in the coverage amount.
How long can the policy cover me?
Single start "one shot" new construction policies are issued on an annual basis and can be renewed once. A third year of coverage may be available for a higher premium. Reporting form policies for builders with multiple starts can also provide coverage for a maximum of three years. Remodeler policies allow up to two years of coverage.
What happens if I have a loss?
If you have a covered loss, the Builders Risk Policy will pay to restore your construction project to where it was just prior to the loss.
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