Protect Your Construction Project From Start to Finish
Building or renovating a property is a major investment. From the first day of construction until the project is completed, your building materials, equipment, and partially completed structure can be vulnerable to unexpected losses.
Builders Risk Insurance is designed to help protect eligible property during the course of construction.
At A-1 Insurance Services Inc., we help property owners, contractors, and developers find builders risk coverage designed around the specific needs of their construction projects.
What Is Builders Risk Insurance?
Builders risk insurance, sometimes called course of construction insurance, provides coverage for certain property associated with a construction or renovation project.
Depending on the policy, coverage may apply to the building under construction as well as certain materials, fixtures, and other property intended to become part of the completed structure.
Builders risk coverage is generally temporary and is designed to remain in force during the construction period, subject to the policy's terms, conditions, and expiration provisions.
Who Needs Builders Risk Insurance?
Builders risk insurance may be appropriate for:
- Property Owners
- General Contractors
- Home Builders
- Developers
- Commercial Property Owners
- Real Estate Investors
- Remodeling Contractors
- Construction Companies
- Building Owners
- Individuals building a new home
The party responsible for purchasing the policy can vary depending on the construction contract.
What Can Builders Risk Insurance Cover?
Coverage varies by insurance company and policy, but builders risk insurance may provide protection for eligible property such as:
The Building Under Construction
Coverage may apply to the structure as it is being built, including certain permanent components and materials that are intended to become part of the completed building.
Building Materials
Materials at the construction site may be covered against certain covered causes of loss.
Examples can include:
- Lumber
- Drywall
- Windows
- Doors
- Roofing materials
- Flooring
- Cabinets
- Plumbing materials
- Electrical materials
- Other construction materials
Fixtures & Equipment
Depending on the policy, certain fixtures and equipment intended to become a permanent part of the building may be covered.
What Causes of Loss Can Be Covered?
Depending on the policy selected, builders risk insurance may provide protection against covered losses such as:
- Fire
- Lightning
- Wind
- Hail
- Theft
- Vandalism
- Certain weather-related losses
- Certain other covered causes of loss
Coverage varies by policy, and exclusions and limitations apply.
Theft & Vandalism
Construction sites can be attractive targets for theft and vandalism.
Materials, tools, appliances, wiring, HVAC equipment, and other property may be vulnerable before the project is completed.
Builders risk insurance may provide coverage for certain theft or vandalism losses, depending on the policy.
Security measures such as fencing, lighting, cameras, and secure storage may also help reduce the risk of a loss.
Renovation & Remodeling Projects
Builders risk insurance isn't limited to brand-new construction.
Coverage may also be appropriate for certain major renovation or remodeling projects.
Examples include:
- Major additions
- Structural renovations
- Commercial renovations
- Residential renovations
- Interior build-outs
- Property conversions
- Major repairs
The type and scope of the project can affect eligibility and coverage.
Soft Costs
Some builders risk policies may offer coverage for certain soft costs resulting from a covered loss.
Soft costs can potentially include expenses associated with delays or additional costs caused by a covered property loss.
Examples may include certain:
- Architectural fees
- Engineering fees
- Permit expenses
- Financing costs
- Additional interest
- Legal or accounting expenses
Soft-cost coverage is not automatically included in every policy, so it's important to discuss your project with your insurance professional before purchasing coverage.
Business Income & Rental Income
If a construction project is being developed for commercial use or rental purposes, a covered loss could delay completion and the property's ability to generate income.
Depending on the project and policy, coverage for certain business income or rental income losses may be available.
These options should be discussed before construction begins.
Construction Site Equipment
Construction projects often involve equipment, tools, and machinery.
Depending on the circumstances, some property may require separate coverage such as contractors equipment or inland marine insurance.
Examples include:
- Construction equipment
- Tools
- Generators
- Compressors
- Portable machinery
- Other contractor-owned equipment
It's important to understand what is covered under the builders risk policy and what requires separate insurance.
What Is Typically Not Covered?
Builders risk policies have specific exclusions and limitations. Depending on the policy, coverage may not apply to certain losses involving:
- Employee injuries
- Contractor liability
- Faulty workmanship
- Professional errors
- Normal wear and tear
- Certain flood losses
- Certain earthquake losses
- Certain equipment
- Certain vehicles
- Certain business property
Builders risk insurance is primarily property coverage. It generally does not replace general liability, workers' compensation, commercial auto, or other insurance policies.
Builders Risk vs. General Liability
These two coverages serve different purposes.
Builders Risk is primarily designed to protect covered property during construction.
General Liability is designed to protect against certain third-party claims involving bodily injury, property damage, and other covered liability exposures.
A construction project may require both types of coverage.
Who Is Covered?
Depending on the project and policy, several parties may have an interest in the construction project.
These may include:
- Property owners
- Contractors
- Developers
- Lenders
- Project managers
- Other parties with an insurable interest
Mortgage companies and lenders may have specific insurance requirements that must be satisfied before funding a project.
When Should Builders Risk Coverage Begin?
Ideally, builders risk insurance should be arranged before construction begins and before materials are delivered or work starts, depending on the circumstances.
Waiting until construction is underway could create unnecessary exposure.
A-1 Insurance Services Inc. can help you determine when coverage should begin based on your project's timeline.
How Long Does Builders Risk Insurance Last?
Builders risk insurance is generally intended to cover the project during the construction period.
The policy duration can depend on:
- Project size
- Construction schedule
- Type of project
- Estimated completion date
- Insurance company requirements
If construction takes longer than expected, the policy may need to be extended.
It's important to notify your insurance agent if your project is delayed.
Information Needed for a Builders Risk Quote
To obtain an accurate quote, we may need information such as:
- Property address
- Type of construction
- Project description
- Estimated completed value
- Construction cost
- Start date
- Estimated completion date
- Contractor information
- Construction plans
- Existing structure information
- Square footage
- Security measures
- Financing information
- Other project details
Providing accurate information helps ensure the policy is properly structured for the project.
Protect Your Investment During Construction
Construction projects involve significant financial commitments. A fire, storm, theft, or other covered loss could cause costly delays and potentially damage materials and property before the project is completed.
Builders risk insurance can provide an important layer of protection during this vulnerable stage of the property's life.
Get a Builders Risk Quote
Whether you're building a new home, developing commercial property, or completing a major renovation, A-1 Insurance Services Inc. can help you explore your builders risk options.
Protect your project from the ground up.
Contact A-1 Insurance Services Inc. today for a builders risk insurance quote or coverage review.