Builder's Risk Insurance
Builder’s Risk Insurance Provides
Peace-Of-Mind To Builders, Developers
and Commercial Property Owners
Are you planning to build a commercial property? Can you imagine if disaster struck mid-construction… and you lost everything?
You lose all of the materials. You lose all of the labor costs you spent over weeks or months. You lose all of that time and effort you endured for so long. And suddenly, you’re back at square one. Starting over. Or worse, bankrupt!
While it is indeed rare that disaster — fire, wind, explosion — strikes a commercial construction project, such an event could do more than demolish your project. It could demolish your bank account and your dreams.
Builder’s Risk Insurance, also known as Course of Construction, is created specifically for anyone involved in the construction of commercial buildings. That could be the owner, developer or builder. Now, the policy could be written to cover just the structure or also include the materials on site waiting to be installed or even the materials off site to be transported.
5 Common Questions
About Builder's Risk Insurance
Question #1: What events are covered by most builder's risk insurance policies?
Natural weather and disaster events are typically covered. These include lightning, hail, fire and wind, including tornadoes and hurricanes. Of course, which weather events are covered may differ by area. (Ex. Wind damage coverage may be limited in coastal areas.)
In addition to natural weather events, you are usually covered by theft, explosions, vandalism and damage from vehicles. In some policies, you are even covered for the loss of rent.
These policies are often written in terms of three months, six months or 12 months. The policy can also be extended if the project is not completed by the end of the initial policy term.
Question #2: How long are builder's risk policies written for?
Question #3: Do general contractors and/or subcontractors need builder’s risk insurance?
This 100% depends on your situation and the contractual obligations of each party. Many times, contractors will agree to carry builder’s risk as part of their agreement with the building owner, however the coverages may be limited. As a subcontractor, it’s unlikely that YOUR materials and equipment would be covered by the general contractor’s builders risk policy. Call our office at 615-987-0067 or contact us today to determine your specific needs.
Builder’s risk insurance is most often used for any new, ground-up construction. However, depending on the magnitude and cost of the renovation construction, your homeowner’s policy would not offer coverage for an insurable event. The details of your renovation matter, and it’s possible you could benefit from builder’s risk insurance.
Question #4: Do I need this insurance policy for a renovation?
While a general liability policy does cover property damage, it does not apply to new commercial construction. You will need to be better protected with a builder’s risk policy.
There are numerous risks involved with the massive undertaking of commercial construction. Just one weather event, just one fire, just one accident could derail your entire project.
While having a builder’s risk insurance policy cannot prevent the damage from such a weather event or accident, it does give you options to start over without a massive financial setback.
I would love to learn more about your commercial construction project. We can work together to find your best course of action to minimize your financial risk while maximizing your peace-of-mind throughout the construction process.
Question #5: I have a general liability policy. Will that cover me?