Builders risk insurance is a specialized type of property insurance that covers property loss or damage arising from construction, renovation or repair operations. This form of coverage is typically needed when the value of the construction project exceeds the policyholder’s standard property limits. Losses from builders risk are not uncommon and can be very expensive to repair. If your business needs a builders risk policy, you should shop around for different quotes and make sure you understand exactly what is and isn’t covered in each policy before choosing one. Contact acepublicadjusters.com to learn more. Here are some things you should know about this type of insurance for contractors:
What is builders risk insurance?
Builders risk insurance is a type of commercial property insurance that protects against losses arising out of construction, renovation or repair operations. This form of coverage is typically required when the value of the construction project exceeds the policyholder’s standard property limits. Builders risk covers the contractor’s interest in the property where the work is being done. This means that it does not cover the interests of the property owner, tenants or other parties with an interest in the property. Builders risk insurance is not required by law. However, many commercial general contractors require their subcontractors to carry builders risk insurance as part of their contract.
Why you need builders risk insurance
All commercial construction projects carry a risk of property damage or loss. That’s why it’s important to have adequate insurance coverage to protect your interests. Builders risk insurance is designed for construction projects where the value exceeds the limits of a standard policy. The most important consideration in selecting builders risk insurance is matching the limits of the policy to the value of the project. Building Materials – Materials and supplies provide the framework for your project. They are the foundation upon which you will build your finished product. While they are not generally insurable on their own, should they become damaged or destroyed, it is important to be sure that they are covered under your policy. Buildings – The structure of your project is the core of the finished product. Construction requires the use of specialized tools and techniques that are designed to protect the structure from damage. The structure is what is insured under a builders risk policy. Buildings – The structure of your project is the core of the finished product. Construction requires the use of specialized tools and techniques that are designed to protect the structure from damage. The structure is what is insured under a builders risk policy. Contact acepublicadjusters.com for more information.
Important terms to know
– Contractors All Risks – This is a form of coverage that provides insurance protection against all losses and damage in connection with the construction project. – Contractors Risk – This is a form of coverage that provides insurance protection against losses arising out of the construction project, but only for the amount of the contractor’s work. This coverage does not cover the contractor’s liability for damage to the property. – Contractors Liability – This is a form of coverage that insures against claims for personal injury or property damage arising from the contractor’s work. It does not apply to the contractor’s other contractual obligations. – Policy Limit – Contractors risk policies are written with a dollar limit. This limit is the maximum amount for which the policy will pay. – Property Coverage – A standard commercial property policy insures the contractor’s interest in the property where the work is being done. It does not cover the interests of the property owner, tenants or other parties with an interest in the property. – Special Contractual Provisions – Builders risk policies have special contractual provisions that modify the standard commercial property policy. These special provisions cover only losses arising out of the construction project.
When you should NOT buy builders risk insurance
We recommend that you purchase builders risk insurance for any commercial construction project that is expected to cost more than $500,000. However, there are some situations where you should NOT buy builders risk insurance. When you have other coverage that will respond to a builders risk claim, such as a commercial general liability policy, you do not need builders risk insurance. You should also not buy builders risk insurance if you don’t intend to use it. What does that mean? Well, let’s say that you’re about to purchase a new building for your business. You’re planning to do the construction yourself, and you don’t plan on hiring any outside contractors. In this case, you don’t need to buy builders risk insurance because you won’t have any claims to file.
Conclusion
Builders risk insurance is a specialized type of property insurance that covers property loss or damage arising from construction, renovation or repair operations. This form of coverage is typically needed when the value of the construction project exceeds the policyholder’s standard property limits. Building materials provide the framework for your project. The structure of your project is the core of the finished product. And the policy covering the risk is the builders risk policy. When you’re about to begin a construction project, make sure you have enough builders risk insurance coverage.
Give American Claims Ensurance a call at 800-204-2463 or go to acepublicadjusters.com to find out how we can help you.