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The Pros and Cons of Builder’s Risk Policies

Contractors are increasingly turning to Builder’s Risk policies to protect their investment.  A five-year period ending 2018 saw builders file claims totaling $8.8bn. This number will increase further in the coming years due to labor dynamics and more frequent natural disasters. With that in mind, could Builder’s Risk Insurance be the answer to your problems? In this article let’s go through some of the pros and cons and see how this coverage will protect you.


Optional Inclusions To Get You Full Coverage

Folks don’t understan Builder’s Risk policies. The coverage and what isn’t often remains unclear until there is an actual loss. Your Builder’s Risk insurance will have optional inclusions for ‘soft costs’ which can get confusing. However, in this guide we will unravel the confusion. With the right insurance provider, you can be confident in getting a policy that truly protects your business.


The Pros Of Builder’s Risk Policies

  1. Coverage against all common losses: This insurance protects the structure under construction as well as the equipment in use for the project. Your transportation risks will also be reduced. Builder’s Risk policies reimburse you for any damage to materials or equipment while in transit.
  2. Protection against law changes: Building codes are known to change multiple times throughout the lifetime of a project. Such changes during construction can cause delays if you are lucky, and heavy losses if you are not. A good Builder’s Risk Insurance policy will make sure that you’re not leaving it to chance, and will secure your investment.
  3. No delays: A unique advantage of this coverage is that your policy requires almost no underwriting. As a result, coverage can take effect within hours of our agent giving you a quote. A quote at a price that is always the best available in the market.

The Cons Of Builder’s Risk Policies

General Liability is not covered: While these policies cover most external events, they do not provide protection against third-party claims. Losses arising from the following are NOT included:

  • Damage to a commercial space
  • Personal property damage
  • Lawsuits related to false advertising
  • Slander and libel
  • Copyright infringement

Adding General Liability to your insurance plan will protect you against these losses.


No protection against Workers Compensation: Even though standard construction projects are not as dangerous as roofing projects, employee injuries are fairly common. However, your Builder’s Risk Insurance policy will not cover any workplace accidents. You may end up paying high medical costs, rehabilitation expenses, and partial lost wages while the employee is unable to work.  Adding a Workers Compensation policy to your insurance plan will give you added protection.


Experts in Builder’s Risk Policies

We have more than two decades of experience in providing Builder’s Risk policies that suit your business’s requirements. Builder’s Risk Insurance remains a catch-all policy against most construction-related risks. Its reliability and cost-efficiency is persuading more and more contractors to opt for Builder’s Risk before beginning a project. Of course, adding General Liability and Workers Comp will protect you further. Protect your business today by calling us on 888-819-1228.

Avatar for John Brown
Written by: John Brown
John has more than 25 years of experience in the insurance industry. He grew from a star insurance producer to owning one of the largest agencies in the country; he's a reference regarding contractor's insurance, commercial insurance, and builders' risk insurance.