Business insurance quotes

Builder's Risk Insurance

Builder's risk insurance is typically used to provide coverage for a building or any other type of structure that is under construction. You will actually find that the vast majority of lenders are unable to provide financing for a building project unless you have builder’s risk insurance in place. There are numerous forms of protection that this type of insurance policy provides and this includes coverage for loss resulting from fire, wind damage, or acts of vandalism. You also have the opportunity to add additional types of coverage to your policy such as losses from flood, earthquake and terrorism.

The person who is responsible for purchasing builder’s risk insurance will be the owner of the building, although in many cases the contractor of the project will usually also be added to the policy as a named insured person. Builder's risk insurance will provide coverage against loss to the building or structure, and indeed the policy will generally cover materials or supplies that are found on the job site.

You will often find that a builder's risk insurance policy will have coverage that goes into several million dollars, and therefore it is recommended that you always deal with an experienced insurance broker. The policy will need to be carefully prepared to ensure that the owner of the building has the appropriate type and level of protection. This will involve an insurance broker completing an accurate estimate of the costs of both materials and labour for the project. A builder's risk insurance policy should also cover the value of the completed building.

It is vitally important that an insurance broker also knows specific details about the size and scope of a project. This should include the number of stories high the building will be, the specific materials that will be used and the type of roof that will be constructed. In addition to this, the actual location of the building should be considered as this will help the insurance underwriters to determine the level of risk that an insurance company may have to take.

A builder's risk insurance policy will also need information to be provided about the contractor who is in charge of the project. In fact this information will need to be gathered prior to a builder's risk insurance policy being issued. This should include the number of years the particular contractor has been in business, the total number of years of experience that the construction company has in dealing with similar projects, and also whether the company has previously reported any losses.

Prior to the policy being issued an insurance broker will be to know the scheduled start date for construction, and indeed the projected dates for every stage of the process. This is typically because some phases of construction tend to present a higher level of risk of loss, and therefore the insurance company will need to know about these, and exactly when they will take place. Whenever the construction of the building or structure has been completed, this type of insurance coverage will change to a property and liability insurance policy.

Some additional events that are covered under a builder's risk insurance policy will include theft, lightning, hail, explosion, and damage from vehicles or aircraft. There is also limited coverage provided for collapse. A builder's risk insurance policy will also have certain standard exclusions such as earthquake, employee theft, contract penalty, government action, mechanical breakdown, water damage, war, weather damage to parts of the property in the open and voluntary parting. Possibly the most important exclusion from this type of policy will be damage that results from faulty design, materials, planning and workmanship.

There are also certain extensions that can be added to this type of policy such as a property in transit, which will protect your property from loss while it is being transported to the job site. You can have coverage extended to apply to scaffolding, temporary structures and construction forms, although these will only be covered while they are at a location you have reported. If your property is in temporary storage in a secure location then this will be covered. This type of policy will also cover a fire department service charge, debris removal, valuable papers such as site plans and blueprints, and sewer and drain backup.

A builder's risk insurance policy will not cover the property of others. Subcontractors will be required to have their own insurance, there will be no coverage provided for tools or equipment and it will not cover for liability or for accidents on the job site. This type of insurance policy will often be written in terms of three months, six months or twelve months. If the project has not been completed once the initial policy term ends, it can usually be extended. However, a builder's risk insurance policy will typically only be extended one further time, and no more.

Comments are closed.