Smarter Builder's Risk Insurance
Save up to 35% on your builder's risk insurance coverage
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What is Builder's Risk Insurance for Businesses?
Builder’s risk business insurance can be thought of as a sort of ‘construction insurance.’ It covers the premises under construction or renovation, as well as the materials on site, from damage caused by weather conditions, fire, vandalism, theft, and so on. Builder’s risk is only meant to cover the construction stage, and usually lasts from 6 months but can go up to one year. Builder’s risk insurance is not the same as commercial general liability (CGL) insurance. CGL insurance is the overarching coverage that all businesses should carry, which covers things like personal injury. If there is a fire during renovations, builder’s risk insurance will cover the damage. If a delivery person slips on spilled paint while attending the construction site, CGL would cover the costs associated with that injury. That being said, a builder’s risk policy can also include CGL.
Who Needs Builder's Risk Business Insurance?
The property owner or contractor will usually require this type of insurance for new home construction, new commercial build construction, adding a second story or home-addition to the property or any other major renovation projects. Builder’s risk insurance coverage is meant to protect those with a financial stake in any construction or renovation project. It might also be required by some contracts, such as under the terms of a mortgage.
Examples of Builder's Risk Insurance Claims
Stolen materials from a property
Fire Damage from lightning
An apartment building has been undergoing major renovations before new tenants move back in, and during the night a group of teenagers have broken into the house and have stolen the new hardwood floors that were about to be installed. Builder’s risk insurance can protect against the loss.
Frequently Asked Questions
Why Should You Get Builder's Risk Insurance Coverage?
The purpose of builder’s risk insurance coverage is to protect stakeholders against the financial loss from damage that occurs during construction. Without this coverage, both owners and builders could be financially liable from these sorts of losses. While coverage is usually held by builders, property owners can take out coverage as well.
What Can Affect the Price of Builder's Risk Business Insurance?
The cost of builder’s risk business insurance all depends on the nature of the construction. The length of time that coverage will be needed, the location of the project, the volume of work being done and the extent of the work will all determine the price of insurance coverage. Renovations to a home will usually be less extensive to insure than new construction of a multi-tenant property.
When Should Businesses Purchase Builder's Risk Insurance?
Builder’s risk insurance should be taken out prior. Coverage taken out after the start of construction will likely be ineffectual to cover the full scope of a project, and may leave builders in a risky position. These risks are easily avoidable by ensuring that the right coverage is in place before starting any work, as the costs of coverage are astronomically less than the cost of a major loss.