Builders risk insurance is a special type of property insurance which protects your financial interests during the course of a construction project. Builders risk insurance protects against damage to structures under construction as well as materials, fixtures and/or equipment being used in the construction project.
Builders Risk insurance can cover a variety of construction projects. The coverage protects a policyholder’s financial investment should loss occur from theft, fire, vandalism, hail or a number of other perils.
While your policy comes with standard coverages, endorsements are available that enable you to build more robust insurance protection. Most coverage limits can be adjusted to meet the needs of your project.
If your project will be financed with a construction loan, the lender is likely to require that your project be protected with a builders risk policy through completion. Even if coverage isn’t required by a lender, anyone embarking on a new construction project - residential or commercial - should consider a builders risk policy to insure against risk of loss from damage to property under construction.
Whether your project is residential or commercial, builders risk coverage will protect a new build, remodel or simple installation for a variety of projects.
Nearly any one with a financial interest in the completed project. This can include individuals or entities including contractors, business owners, homeowners or financial institutions. In some cases, the contractor or project owner may be required to purchase builders risk insurance.
Coverage generally begins once an application is completed, approved and paid in full. However, policy provisions may restrict when coverage begins for your project. Be sure and read your policy to understand specifically what triggers commencement of your coverage.
The policy will protect your project for the duration of construction provided premiums are paid and all other conditions for coverage are met. Your policy will state the conditions upon which coverage will cease, which may be upon occupancy or when the building is put to it intended use.
Several factors will play a part in determining the cost of your builders risk policy. The most important factors include the amount of coverage (including optional endorsements), location, construction type, and project type.
While this is a common question, an understanding of the key details about the risk involved in the project will be needed before a ballpark figure can be provided.