Builders Risk

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A Builders Risk insurance policy is designed to protect a building under construction in the same way that a conventional policy protects a finished building. However, a building under construction presents some unique exposures and ownership issues that a Builders Risk policy can address.

Address the Higher Risk of Loss

Buildings under construction go through many phases, and from the foundation building phase up to the finishing phase, the structure is exposed to many different hazards that can cause damage resulting very costly repairs.

Whether your project is a residential home or a commercial building, chances are that the project is left unattended during nights and weekends and it is often difficult to secure a job site. During this time, there is a high risk of vandalism and theft of building materials and a Builders Risk policy can protect you from these risks.

Storm damage is another significant risk to buildings under construction, especially during the phases involving exterior finish applications such as roofing and siding.

Your Construction Contracts

The project owner or the general contractor can purchase a Builders Risk policy, and when a general contractor purchases the policy, both the contractor and the project owner can be named as insured entities on a Builders Risk policy, which will ensure that everyone’s financial interests are protected in the event of damage.

Construction contracts can be complicated documents, but they are important when it comes to Builders Risk insurance policies because that contract will usually specify who has the duty to purchase a Builders Risk policy and what type of coverage that policy should include. A Builders Risk policy can be limited to specified perils or it can be an “open peril” or an “all risk” policy that affords much broader coverage. In either type, there will be exclusions that apply, so be sure to review your policy.

If there is a construction project in your future, it is important that you review you construction contracts and to make sure that you are in the best position to protect your new project. Be sure to speak to a qualified professional agent about your Builders Risk needs.