What is Builders Risk Insurance?
Builders Risk insurance, also often referred to as a Course of Construction insurance policy, protects buildings and structures that are being built or renovated. The policy covers the cost of construction, including materials and equipment added to the property such as HVAC systems, elevators, and temporary structures such as scaffolding from the time the construction first begins, to the time the project is completed and a certificate of occupancy is issued.
Who Needs Builders Risk Insurance?
Either the General Contractor (GC) hired to do the work, or the Property Owner if they are acting as their own General Contractor, should purchase the policy. If a lender is financing the project, they’ll need to be listed as additional insured on the policy. Sometimes a GC will ask the property owner to purchase a Builders Risk policy themselves. It really depends on the language used in the contract.
Two Most Common Types of Builders Risk Policies:
Ground-Up – New Construction
Remodeling, either Structural or Cosmetic Work (Tenant Improvements)
What can be protected?
Property Loss – Replacement Cost
Profits – Policies can cover labor, materials and equipment used in the project, and profits at times.
Debris Removal (after a loss)
Building Ordinance or Law – Building codes can change from the beginning of the project through to its completion.
Temporarily Stored Material or Equipment – while stored off the jobsite, or in transit to the jobsite
Theft of materials from the moment deliver is made to the job site
Coverage for materials that are installed or uninstalled
Flood & Earthquake
These two lines of coverage are almost always excluded from insurance policies. They must be purchased as separate policies.
Kristie English, M.Ed.
Principal / Agent
Do I need to worry about liability insurance if the General Contractor I hired has their own insurance for their business?
Particularly if this is for new construction and not a remodel project, it’s recommended you consider purchasing a premises liability insurance policy for the duration of the project. This protects you from potential claims from individuals being injured on your property, and claiming their injury had nothing to do with the construction company or their operations at the time. This is particularly true if you have a pool or other large body of water on or adjacent to your property.
We're here to help you understand the best options for protecting your building during construction.
Call us at (833) BIG-TREE / (425) 673-7948, or use our online form to request a quote.