Builder’s risk insurance can pay for damage done to a structure still under construction. It can cover costs resulting from fire, vandalism, weather, or on-site tool or equipment theft.
Though other insurance policies can cover your construction tools and protect against injuries and lawsuits, they typically don’t pay for damage to a building under construction. That’s where builder’s risk insurance comes in. Also called course of construction insurance, this policy addresses the unique risks posed by working on someone else’s property.
General contractors and other construction professionals benefit from this policy in three ways:
Your clients or local building codes might require you to buy builder's risk insurance before you start working at a construction site. It's important to carry this coverage since commercial property insurance only covers your office or other owned building and its contents, not items in transit, materials stored at a construction site, or a structure in progress.
Anyone with a vested interest in a construction project might consider buying this policy. If the building owner or developer buys this coverage, there's no need for you to carry it as well. However, contractors and construction businesses should make sure they are listed on the policy as a named insured.
It's important to have coverage begin before materials arrive on site, and last the duration of the project. Only after a structure is fully built can another policy, such as homeowner's insurance for residential housing, come into play.
Unfortunately, construction sites are often targets for thieves. They can make off with thousands of dollars in copper wire and other items, leaving general contractors, carpenters, and other construction professionals to foot the bill. Builder’s risk insurance can compensate you for stolen materials, which means you won’t lose time or money on your project.
A building that suffers fire damage can often cost more to clean and restore than was spent on the original construction. Builder’s risk insurance can pay for repairs or a complete rebuild of a building or other structure under construction that is affected by a fire or other catastrophe.
A vandal could destroy or deface your hard work in a matter of minutes by breaking windows, destroying fixtures, and spray painting newly drywalled or painted rooms. When your construction site is vandalized, builder’s risk insurance can reimburse you for the damage so you can get on with your work.
Even with proper precautions, you may not be able to stop the weather. Builder’s risk insurance can cover structural damage caused by windstorms, rain, and other non-severe weather events.
This policy does not cover natural disasters, such as earthquakes, floods, and tornadoes. Talk to a licensed Insureon agent about adding endorsements for broader coverage.
Builder’s risk insurance can cover damage done to a structure still under construction, but it doesn’t provide coverage for all risks. Construction and contracting business owners should also consider:
General liability insurance: This policy can cover expenses related to customer injury, customer property damage, and advertising injury.
Commercial auto insurance: This policy covers vehicles owned by your construction or contracting business. It typically pays for accidents, theft, weather damage, and vandalism.
Workers’ compensation: This policy is required in most states for businesses with employees. It can cover medical expenses when an employee is injured on the job.
Professional liability insurance: Also called errors and omissions insurance, this policy can help cover legal expenses if a contractor is sued for unsatisfactory or negligent work.
Contractor’s tools and equipment insurance: This policy helps pay for repair or replacement of a contractor’s tools and equipment if they are lost, stolen, or damaged.
Are you ready to safeguard your construction or contracting business with builder’s risk insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.