A Basic Overview Of A Builders Risk Policy


For any kind of accident or problem that may occur, it’s important to have the appropriate insurance policies for the building. The proper coverage for your building and all materials will be provided by a builders risk insurance policy. This policy covers only the building and its components as they are built.

Structures that are covered by the coverage

You can get builders risk insurance that covers a wide range of structures. This covers new structures as well as additions to existing structures. Also covered are equipment and items that can be considered as part of the building. It can include anything from an electric system to a boiler.

Time Basics

The type of policy you choose for builder’s insurance must be tailored to your specific needs. The policy should cover the time it takes to construct a building. A policy that covers three, six and twelve months is the most common. You can usually extend the policy if you need it. The policy can only be extended once so it is important to know how long the construction will take.

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Coverage Basics

The policy limit will determine the amount of damages that can be paid. The total cost of materials and labor costs are included in the calculation to determine the limit. The land on which the building is located is not included in the calculation. It is important to consider the coverage required when calculating how much coverage you need.

What Builder’s Insurance Doesn’t Cover

The provider will determine what a policy does not cover. However, there are many things that policies do not cover. Along with government action and war, employee theft is not covered. The policy does not cover contract penalties.

Shoddy construction and faulty materials are important areas of construction that aren’t covered. Bad planning and design are not included. It is important to ensure that buildings are constructed with high-quality materials, solid planning and the best possible design.

Other issues like weather damage or earthquakes are not generally covered. Ask your insurance provider if you are eligible for special earthquake or water damage coverage.

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It is crucial to read over all insurance documents carefully in order to understand exactly what is and what is not covered. Although some people believe certain items are automatically covered, it is a mistake to assume otherwise. These policies don’t cover items like tools. A separate insurance policy will be required if someone is injured on a construction site. Builder’s risk insurance does NOT cover accidents.

It is a general rule that an insurance policy expires when the building is finished.

Other things the policy covers

Builder’s risk insurance will cover many things. General theft is typically covered, along with fire and wind damages. Many policies also cover other weather problems like hail and lightening. The policy may cover damage to aircraft or vehicles.

Coverage Special

Certain extensions of coverage policies allow you to cover a wide range of items. Any construction materials or property being transported to the site are covered.

Coverage can also be extended to temporary construction equipment like scaffolding. These structures will only be covered if they are present on the jobsite.

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Temporary places are sometimes necessary for materials storage. There are extensions of coverage that will protect these materials as long as they are used on the construction site.

Policy coverage may also include unforseen events like sewer backups.

A builders risk policy will protect you from many types of damage or loss when you are building a new structure.