Builders Risk Insurance
Every construction project is different. But, they all have one thing in common – they cause stress. Investing in builder’s insurance will give you peace of mind throught your project.
What is builder’s insurance?
Builder’s insurance is a type of property insurance which protects building that are under construction or renovation.
Because it covers projects from the first shovel in the dirt to the building’s completion, it is frequently called course of construction insurance.
The premium for the Builders Risk, excluding theft of materials, is a rate per $100 of the completed dwelling’s value. For example, if the house will cost $200,000/$100=$2,000 x rate – $25=$500 annual premium.
What can it cover?
By their nature, builders expose construction projects to certain risks. Having materials sitting outside are just par for the course. It’s no wonder these supplies are susceptible to wind damage and more.
When a building is under construction, it’s at its most vulnerable stage. It’s easy to fall victim to:
- Vandalism
- Weather-related structural damage
- Accidents
- Fire
A builders insurance policy may also cover:
- Temporary storage buildings, scaffolding, and fencing
- Debris removal
- Blueprints and other types of valuable papers
Builder’s insurance covers soft costs as well. Soft costs are expenses indirectly related to the labor, materials or actual building of the project. This includes:
- Lost sales
- Real estate taxes
- Rental income
What does it not cover?
Builders insurance is flexible. It has to be to accommodate many of the risks that are unique to construction sites. But there are certain things that most policies don’t cover:
- Damage caused by natural disasters: Tornadoes, earthquakes, and flood coverage are not part of the typical builder’s insurance plan. But, there is a way to protect the project from these events. It’s called a severe weather endorsement and you can add it to your builder’s insurance.
- Faulty materials or design: It won’t cover damage to the structure that’s because of faulty materials, construction, or design. Liability insurance protects against these types of mishaps.
- Tools and equipment: Damaged stolen, or lost tools and equipment are not part of the package. They fall under the contractor’s tools and equipment insurance.
- Staff injuries: It doesn’t protect any staff member who gets sick or hurt on the construction site. Worker’s compensation insurance pays medical bills and lost wages from occupational illnesses and injuries.
Limits
Builders insurance is the backbone of every successful construction project. But, it’s also a temporary insurance policy.
When it comes to building projects, the relationship with your insurance agent is as important as the one with the contractor. An experienced professional will find a policy that addresses your specific needs.
Using Kenneth Rhodes and Associates for Builders Risk Insurance
We have carriers that offer Builders Risk through the Home Builder Program. This coverage can be written for a contractor or as personal insurance for the future owner on a “one time” basis, covering only that dwelling.
Our team of professional agents is ready to work with you to get the policy you need.