Builders Risk Insurance
While being involved in the construction process for a new building or structure is exciting, there are numerous risks involved. After all, a variety of events could jeopardize the project's success, potentially causing property damage and costly delays. According to recent National Fire Protection Association research, buildings under construction or renovation are more likely to catch fire than finished structures. Every year, fires cause more than $300 million in property damage. It is critical to have adequate coverage in place so that losses are minimized when such events occur. Fortunately, builders risk insurance can assist in this situation.
What's Covered?
Builders risk insurance is a type of temporary coverage that protects a building or structure while it is being built. This type of policy generally provides assistance for damages caused by a variety of events, such as lightning, wind, hail, fires, explosions, theft, and vandalism. In these cases, builders risk insurance can help cover the costs of restoring any damaged property on the construction site. Property covered includes the building or structure itself, as well as equipment, materials, and supplies. Furthermore, if such property damage causes additional complications, such as project delays or lost income, builders risk insurance can help cover these costs. It is important to note that most builders risk insurance policies exclude coverage for damages resulting from specific events. Acts of terrorism, wear and tear, employee dishonesty, mechanical breakdowns, poor workmanship, and faulty materials or design are all common coverage exclusions.
How It Works
This type of policy is typically implemented on the same day that the associated project contract is signed. Coverage typically ends when the project is completed. However, not all builders risk insurance policies are created equal; different policies may have different triggers that signal the start and end of coverage.
Who Needs It?
Builders risk insurance is essential for anyone with a financial interest in the construction project, including the property owner, contractors, and subcontractors. With this in mind, construction employers like you cannot afford to overlook this type of coverage when securing project contracts for the development of new buildings or structures. However, purchasing builders risk insurance is only one component of your overall risk management strategy. Implementing effective loss control measures on the construction site is also critical for avoiding costly incidents and lowering potential claim costs.
For additional industry-specific guidance and insurance solutions, contact INSURICA today.
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