Builders risk insurance, also known as Course of Construction insurance, is a specialized type of property insurance designed to provide coverage for buildings and structures while they are under construction. This policy is essential for protecting project owners, general contractors, and subcontractors against direct physical loss or damage to covered property.
What Does Builders Risk Insurance Cover?
Builders risk policies extend coverage beyond just the structure itself. They can also include protection for:
- Materials and supplies on-site
- Materials in transit
- Materials stored temporarily at off-site locations (if they are intended to become part of the structure)
Additionally, these policies can be customized to include coverage for loss of income and additional expenses. This aspect becomes crucial if project completion is delayed due to an insured property damage loss.
How Long Does Builders Risk Insurance Last?
Builders risk insurance is temporary and applies only during the construction, erection, and fabrication processes. Typically, these policies remain in force until the construction project is completed. Once construction is finished, the owner of the building or structure must secure a traditional property insurance policy.
Common Covered Risks
The specifics of coverage may vary between insurance carriers, but most builders risk policies cover the following causes of property damage:
- Fire
- Wind
- Hail
- Theft
- Lightning
- Explosion
- Impact by vehicle or aircraft
- Vandalism
What Is Not Covered?
While builders risk insurance provides essential protection, certain types of losses are generally excluded. These may include:
- Property damage caused by employee dishonesty or theft
- Property damage caused by earthquakes
- Acts of war
- Government actions
- Mechanical breakdowns
- Flaws in design, planning, or workmanship
Exclusions can vary depending on the policy, so it’s important to review the terms carefully to fully understand what is and isn’t covered.
Why You Need Builders Risk Insurance
Protecting your construction project with a well-structured builders risk insurance policy is essential. It helps safeguard your investment, prevent financial setbacks, and ensure smooth project completion.
Get Expert Guidance
Navigating the complexities of insurance can be challenging. Our team is available to answer your questions and provide risk management solutions tailored to your needs. Contact us today to ensure your construction project is fully protected!
