Builders risk insurance can be complex and easily misunderstood, as coverage and policies vary from one insurance company to the next. But in a nutshell, builders risk insurance is property protection for your construction project, from start to finish.
It protects the building or structure, as well as any materials, supplies and equipment used in the course of construction. A builders risk policy can be purchased by the contractor, the building or business owner, or even a lender, and may also cover the architect or engineer involved.
Once your project is complete, your builders risk insurance policy would end, and you’d want to consider a commercial property insurance policy to continue protecting your investment.
How a builders risk insurance claim can impact you
Unfortunately, the “unexpected” happens more frequently than we’d like. Especially with construction projects. Having the right insurance can help alleviate the incredible financial burden of a claim.
Of businesses are affected by a burglary or theft
Of businesses are affected by wind or hail damage
The average cost of a fire claim for a small business
What is (and is not) covered by builders risk insurance?
Just like every construction project is different, no two commercial builders risk policies are alike. Each policy has limitations, exclusions, and additional optional coverages that you’ll want to be aware of and have customized to fit your needs, before you break ground.
Builders risk insurance may not be required for your project (unless you have a loan), but it is something you should consider. Let us help you decide whether this coverage is right before your project begins.
Do I need builders risk insurance?
It depends. If you have a construction project in the works, you’ll first need to find out who is responsible for buying the insurance. Your general contractor may already have a policy in place, but if not, it could be up to you to protect your investment.
At Berry Insurance, we always recommend that the business owner or building owner be the person that buys the insurance coverage for their project.
A builders risk insurance policy can cover a new construction, remodel or renovation, or an installation. They can also be customized to cover one specific project or can be designed to cover many projects at the same time.
I’ve already started construction. Is it too late to get a builders risk insurance policy?
Most likely, yes it’s too late. Typically a builders risk insurance policy needs to be purchased before the project starts.
If your project takes longer to complete than planned (as most tend to do), you can extend your policy. But unfortunately, if you’ve started before you had coverage in place, most insurance companies won’t be able to help.
How much does builders risk insurance cost?
Policies can range anywhere from a few hundred to several thousands of dollars, depending on your unique project needs and how much of an investment you wish to cover.
Some of the factors that will determine the price of this insurance are the project location, what protection and controls you have in place to keep your property safe, how much coverage you need, who is completing the work, the project timeline, and more.
How builders risk insurance protects your project
Commercial property insurance would cover an existing building, but as soon as you make renovations to it, or start a new construction, that coverage ends.
Protection from natural disasters
Fire, wind, snow, ice, hurricanes, tornadoes, and water - we’ve seen it all in Massachusetts. And it all can cause some serious damage. But the right builders risk insurance can protect you from whatever Mother Nature throws your way.
Protection before work begins
Materials and supplies have been delivered. Tools and equipment are onsite waiting for installation. The right builders risk insurance policy will reimburse you for damages even before work begins.
Coverage for only as long as you need
With builders risk insurance, your coverage begins before you break ground, and ends once your property is sold or occupied. Not a day longer. You never pay for more insurance than you need.
Compliance with your loan lender
Construction projects can be a significant investment. If you’ve got a lender backing your project, they’ll want to be sure you have coverage for their financial interest.
Simplifying builders risk insurance … one blog at a time
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