Builder's Risk Insurance
Policy Coverage Dedicated to Construction Project Risks
Builder's Risk Insurance is a specialized coverage designed specifically for buildings under construction, and includes materials and supplies pertaining to the construction. Several options are available for Builder's Risk coverage including basic coverage, Completed Value form, and Monthly Reporting form options.
The owner-to-be, the contractor, and any individual who has property involved in the construction project should be named in the Builder’s Risk Insurance Policy. This list often can be quite extensive. Before the policy is completed, the list should be studied to ensure each party was included. If possible the distribution of insurance costs should also be settled in advance.
Insurable Interests may include but are not limited to:
- Property owner
- Contractor
- Any subcontractors (there will often be many of them)
- Any sub-subcontractors employed by the subcontractors
- The financial institution funding the project
- Any architects and engineers
Perils Covered by Builder’s Risk Insurance:
- Fire
- Extended Coverage
- Vandalism
- Sprinkler Leakage
- Sinkhole Collapse
- Limited Volcanic Action
- Falling Objects
- Limited Glass Breakage
- Weight of Snow, Ice, or Sleet
- Limited Water Damage (Not Flood)
With all levels of coverage under the Builder’s Risk Insurance policy, close attention must be paid to exclusions to be sure that significant coverage has not been taken away. Whatever the potential hazard, adequate coverage must be obtained and contingency procedures must be developed. This will facilitate the most efficient transition through the loss period, thus enabling the project to get back on schedule with all parties ideally being fully compensated. Consider enlisting the expertise of a public adjuster to assist you through this often confusing time.
Builder’s Risk Insurance Policy Resources:
Wikipedia – Builder’s Risk Insurance
