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Do you know enough to invest in a Builder’s Risk Insurance policy? Before you go ahead and purchase this coverage for your construction project there are questions you should ask.  These questions may make the difference to get paid, or to suffer financial losses should things go wrong with the project.


First, let’s look at what this coverage is designed to do.


What is a Builder’s Risk Insurance Policy?


Builder’s Risk has another name: course of construction insurance. This is a clue to what protection the coverage provides. This policy protects your construction company from financial loss that arises from damage to the structures or building during the course of construction. In other words, it stretches from the beginning of the project to the end.


  1. Does Builder’s Risk provide coverage for all property damage?


Builder’s Risk protects your business against financial loss from property damage on a construction site, and also the soft costs that can eat into your profits. However, it does not cover third party claims, which is why you have General Liability Insurance.


For example, if the result of your work is damage to a client or visitor’s vehicle, your General Liability policy will cover tthe claim that they bring for property damage. But, say your building under construction is damaged by vandals. Your General Liability does not provide protection for this.


  1. Are all Builder’s Risk policies the same?


So there are things that Builder’s Risk Insurance generally provides coverage for that other kinds of insurance do not. This isn’t the end of it. When you are looking for protection for   property damage to the structure you are building, don’t assume that every Builder’s Risk Insurance policy gives the same coverage.


As with all insurance, you will have to specify items and customize the policy to cover the risks this particular project is likely to face. And, as we all know, no two construction projects are the same.


  1. Does Builder’s Risk cover all your projects?


No. Builder’s Risk Insurance policy is specifically designed to protect structures and buildings that are being built from ground up, renovated or remodeled. However, each project requires its own policy.

Unlike your inland marine which offers day-to-day coverage, your Builder’s Risk Insurance is short term. It only gives coverage for the duration of the project, and only for the period stipulated in your contract. If your project continues for longer than anticipated, your policy period can and should be extended.

Builder’s Risk Insurance Policy: ask before you buy


A Builder’s Risk Insurance policy is like any other in that you have to know what you are signing for. Read the small print. But, if you don’t know what you’re looking for you won’t know what is missing, right?


Ask your insurance consultant to walk you through the terms.  Our agents at Contractors Liability Insurance company are here to answer your questions. Before you start your next construction job, give us a call on 866-225-1950


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