Builders risk insurance is a specific type of property insurance that covers structures during the course of construction. Contractors need this kind of policy to protect them from potential risks during a building project.
What Does Builders Risk Cover?
Coverage of this type pays for expenses associated with damage and loss that occurs on your project site. It safeguards your tools and equipment on the job site and helps cover damage while the work progresses. Included protections vary but typically cover costs stemming from the following incidents:
What Are Some Policy Exclusions?
There are several standard limitations with this coverage. You can often get extensions to protect your business from the following exclusions:
- Employee theft
- Mechanical breakdowns
- Corrosion and rust
- Poor quality of work
- Substandard materials
- Faulty design or planning
- Acts of terrorism
Who Needs Builders Risk Insurance?
If you have a financial interest in a residential or commercial construction endeavor, you likely need builders risk coverage. Typically, the general contractor, owner or developer purchases the policy that protects the project. Some groups you may include as insureds include:
- Property owners
- Development company
- Retail businesses
This specialized insurance safeguards buildings while construction is underway. It is vital for protecting tools, materials and supplies on the job site from unexpected events that cause damage.