If you’re curious about builder’s risk insurance, do yourself a favour. Before you speak at length with any insurance representative about a possible policy, do your homework. Research a handful of insurance providers so when it comes time to get down to business, you’re not wasting your time or theirs.
As a business owner, there are numerous types of insurance you may need to, or want to, look into. One of those might be builder’s risk insurance. For those unfamiliar with this type of insurance, throughout the construction process, it protects against damages to buildings and more. It covers an organization’s or individual’s interest in fixtures, materials, or equipment used during structural renovation. It protects against damage and/or loss.
Builder’s Risk Policies
Here’s the thing, however, about builder’s risk policies… To decide on the right type of coverage for your needs, you will need to explore the intricacies of this kind of coverage. Why? Because there is no standard, cookie-cutter type of policy when it comes to builder’s risk. What does this mean for you? Simply, before being covered, you’ll want to talk with your insurance agency at length.
All of that said, let’s look at builder’s risk insurance policies, who needs them, and the benefits you can expect from one.
Do You Need Builder’s Risk Insurance?
There are a number of businesses/business owners who can benefit from this type of coverage. Typically, this kind of policy is purchased by property owners, general contractors, and custom builders. For proof of insurance, builder’s risk coverage may actually be necessary, but check with your local/state ordinances. It can be a contract requirement according to building codes.
Builder’s risk policies, in the minds of some architects, must be obtained by a property owner because they pay for land improvements. If, from a claim, funds are received directly by a builder, they are allowed that benefit. So, having their own builder’s risk policy is a smart move for a property owner. That way, they’d be in control of the benefits should something happen during the project. Only to rebuild any damage would builders receive funds, in this case.
The Importance of Builder’s Risk Insurance
A wide range of damages/losses/circumstances can be covered by builder’s risk insurance. This can range from vandalism and theft to wind, fire, and more. What your policy specifically endorses can be impacted by the area in which your project is located.
Before any needed materials arrive on a jobsite, coverage should be put into effect. After policy expiration, or when the sale on the structure is closing, coverage comes to an end. Upon occupancy or sale, permanent building insurance will be needed by the new owner. This could be a commercial property policy or a homeowner’s policy.
Important note: Builder’s risk insurance policies do not cover workplace injuries and accidents. Additionally, when the construction is complete, the policy normally ends.
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