Regardless of your latest construction project, there are inevitable challenges that can affect your completion deadline. Completing a project both on time and on a budget is the key to keeping clients satisfied and protecting your bottom line. Ensuring your business is well protected is essential.
The best way to ensure your building business is protected is by consulting with an independent insurance agent. Builders risk insurance is much easier to obtain than you might think when deciding to work with a trusted local advisor.
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What Is Builders’ Risk Insurance?
This type of insurance is a specific type of policy that assists with paying to replace, recover, or repair a construction project’s value. Builders’ risk insurance can cover various types of claims, such as labor costs, theft, fires, and natural disasters.
Having a builders’ risk policy can help building owners and builders save thousands of dollars and their projects.
The key to ensuring your project stays on track is locating an experienced local independent insurance agent with experience in the many types of builders’ risk policies.
Are You Required to Have Builders’ Risk Insurance?
In most cases, it is mandatory to have builders’ risk insurance. Financing is typically required for a building project. Before any work can be performed, most lenders will require the project to be protected by a builders’ risk policy.
In some instances, however, the project may be fully funded. When this is the case, there is no requirement for a builders’ risk insurance policy. Even so, it may be a good idea for you to go ahead and have a system in place to provide an additional layer of protection. The cost is minimal compared to the amount of protection your business receives.
Homeowners and Builders’ Risk Insurance
If you plan to remodel an older home or even build a new home, you should consider purchasing builders’ risk insurance. Lenders will want to see proof of builders’ risk insurance. Even if a lender is not involved in the project, homeowners should consider requesting their builder to protect the project with a policy.
A builders’ risk policy for homebuilding projects accomplishes two goals. First, this type of policy will ensure that homeowners are not held responsible for any potential claims that might arise during the building project. Additionally, a builders’ risk policy will protect the builder and ensure that they are not responsible for paying out of pocket for claims.
Everyone involved will benefit from a builders’ risk insurance policy. Working with your independent insurance agent can ensure you have all the details in place.
Is Builders’ Risk Insurance Right for You?
There are always risks associated with any building project that could delay or even derail the entire project. The build-out process can continue moving with a builders’ risk insurance policy in place, making it possible to complete construction without delays or financial problems.
A local independent insurance agent can guide the right builders’ risk policy for your specific situation.
What Is Covered by Builders’ Risk Insurance?
The purpose of a builders’ risk insurance policy is to protect everything related to the construction project. This policy includes the structure of the build-out itself and everything on the location, such as tools and equipment.
In considering different policies, it’s essential to understand that the most significant difference between systems is what each policy protects against, such as explosions, fires, and even something falling.
There are three different types of builders’ risk insurance coverage. They are basic coverage, broad coverage, and superior coverage.
- Basic Builders’ Risk Insurance
This type of policy protects against fire, wind, explosions, lightning, more. - Broad Builders’ Risk Insurance
This type of policy protects everything that is covered by a basic policy, in addition to water damage, falling objects, and a few other additions. - Special Builders’ Risk Insurance
This type of policy provides protection against theft and everything covered by basic and broad builders’ risk insurance.
Exclusions of Builders’ Risk Insurance
It’s also important to know which types of claims are not covered by this type of insurance. Exclusions for builders’ risk insurance include injuries, accidents, and liability risks. Additionally, this type of policy will not cover natural disasters, such as earthquakes and flooding.
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What Is the Timeline for Builders’ Risk Insurance?
For the most part, builders’ risk insurance will last for three months, six months, or twelve months. The policy can often be extended if the project is not completed by the specified time period. It’s also important to note that coverage may be allowed to continue for as long as 90 days following completion. Coverage may also extend until ownership of the project has been transferred from the contractor or until the new owner occupies the building.
How Much Does Builders’ Risk Insurance Cost?
The cost of builders’ risk insurance is usually based on the coverage level and such factors as the value of the project. Since this is a short-term insurance policy, the cost is typically relatively minimal.
Naturally, the greater the project, the more expensive the policy. This is because there is more that must be insured. Contacting your independent insurance agent can help you to determine the best policy and level of coverage.
Comparing Quotes for Builders’ Risk Insurance
Speaking with a local independent insurance agent is the best way to compare insurance quotes and coverage levels. As there are different types of builders’ risk policies, it’s important to carefully evaluate each option to ensure you find the right type of coverage for your building project.
Navigating Coverage with an Independent Insurance Agent
Your local independent insurance agent can work with you to determine your project’s scope and determine which insurance companies can provide you with the best pricing and coverage.
Even more importantly, an independent insurance agent can provide support if you do need to file a claim. Obtaining claims service as quickly as possible is critical to ensuring your project is completed on time and budget.