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What is Builders Risk Insurancesiadmin February 3, 2020
Builders risk insurance protects the building during its construction. This insurance is important to have because damages and losses can occur from damaged materials, employee error, vandalism, arson, theft or natural disasters.
As a contractor, it is often your responsibility to ensure the building is protected. Whether or not you plan to insure the building, it is vital that your contract specifies exactly who is responsible in the event of damage. This is why builders risk insurance is required for every single construction project. A master policy for all of your projects in a year may also be obtained.
Let’s review the basics of builders risk insurance, who needs this type of coverage and where you can get quality construction insurance in NJ.
Basics of Builders Risk Insurance
Builders risk is also known as “course of construction” insurance. It’s a type of insurance that protects buildings under construction. The policy is effective the day the work starts and ends when the work is completed.
Because every construction project is unique, no two builders risk policies are the same. Most cover property losses due to fire, lightning, hail, hurricanes, theft, vandalism and other risks, though there may be additional coverages as well. In addition to the property itself, builders risk insurance also covers materials, supplies and equipment that are onsite, in transit or held at other locations.
Who Needs Builders Risk Insurance?
Any person or organization that has financial interest in a construction project needs to have builders risk insurance. This includes stakeholders, property owners, subcontractors and general contractors, among others.
Fortunately, you can purchase a policy in your name. This allows you to shop around or speak with your current insurance agent for quotes. Your agent can help you select the appropriate amount of coverage for your upcoming project, whether it’s ground-up installation or remodeling.
Other Types of Insurance that are Important for Contractors
In addition to builders risk insurance, there are other types of construction coverages you should consider depending on the project, its risk and who is involved. For maximum protection, talk to your insurance broker about the following types of construction insurance:
- Commercial and contractor general liability insurance
- Commercial auto insurance
- Workers’ compensation insurance
- Inland marine/Tools & equipment/Installation floater insurance
- Professional liability insurance
- Contractors pollution insurance
Builders risk insurance is an important consideration when starting a construction project. Contact Soden Agency to learn more about your options for safely and effectively insuring your next new construction or renovation project.