Doing a great job in the construction industry means becoming more profitable, but this also comes with risks and exposures associated with this particular line of work. For contractors, whose primary source of income is in building homes and restoration projects, Builders Risk Insurance will provide them with some much-needed relief whenever an issue arises.
Carrying insurance on the property while it is under construction should be the first item on any contractors list. Typically, this is a specialized coverage designed specifically to apply to buildings while they are under construction, and it includes coverage for materials and supplies pertaining to the project. There are also other available options for insuring any items that are not covered under a builders risk policy.
This Coverage Is Essential For All Contractors, Owners
Depending on the precise terms of the construction contract this coverage may be purchased by either, the contractor, or the owner of the building. In either case, all parties connected to the project (who may have property involved in the construction) should be named in the policy. This usually includes the owner, the contractor, along with any subcontractors, any sub-subcontractors employed by the subcontractors, the financial institution supplying funds for the project, as well as any architects and engineers involved in the project.
What does builder’s risk cover?
A builders risk policy provides coverage for any damage done to the insured structure from any number of possible events. Most policies will cover damage from fire or theft, as well as wind damage, lightning, hail, and explosions. Extensions of coverage can also be provided for certain exposures not listed here. For example, let’s say that the property is in transit. Coverage would be provided for any resulting property loss while said property is being transported to the job-site.
Coverage can also be extended to apply to scaffolding, construction forms and any temporary structures, but only while they are at a location that has been reported to the insurer. Any property in temporary storage used or installed in the secured location (and pertaining to the insured company) can also be covered under an extension to the existing coverage.
A contractor will need to purchase a separate policy to cover property belonging to others; tools or equipment, any liability issues or concerns, including accidents on the job site, and sub-contractors are, in most instances, required to have their own insurance. Speak to an agent about any questions or concerns pertaining to Builders Risk Insurance today.