When starting a construction project, it is imperative that you have some form of protection against damage or destruction of equipment and property, both of which are not uncommon. Having a building risk insurance can offer that coverage.
Read this detailed guide to the end to learn all about it, including costing.
What is the builders' risk insurance and how does it work?
Sometimes known as a building or commercial insurance policy, it offers protection against the contractor's equipment, materials and property. It can cover many things ranging from fire, explosion and theft to vandalism and even certain acts of GOD. However, ask your insurer about GOD documents as some may not offer protection against them.
Many contractors often do not consider having this policy that leads to large losses when equipment is damaged or property is destroyed. These insurances can be in the form of terms ranging from 3 to 1
Who needs the builder's risk insurance?
Any type of company or individual who has a financial commitment to a construction project should consider builders' risk insurance. Some of the most common types of candidates for this policy are:
- Construction contractors
- Property owners
- House bottles
- Development companies [19659009ck] Builders  Builders  By Builder's Risk Insurance
Depending on your specific needs, you can add or remove coverage from the insurance, but generally a building risk insurance policy covers damage to your property and equipment specified in the contract. It can also cover additional costs and costs that do not directly affect the construction itself, for example:
- Property taxes
- Interest on loans
- Rental income
- Loss of sales
Certain coverage extensions  Just like any insurance there are some restrictions on builders' risk insurance. It does not cover everything related to the construction as standard, so you may need additional coverage for things like:
- Temporary structures
- Cleaning of debris and pollution
You may or may not be able to obtain additional protection for the above exceptions or other construction-related risks depending on your policy. Ask your insurer about them.
Things that may not be covered by the builder's risk insurance
There will be times when your builder's risk insurance does not offer loss protection; some of them include:
- Beach Zones
- Strong Winds
- War and Terrorism
- Corrosion and Rust
- Equipment Destruction
contact your insurance company and ask about the exceptions before you sign that insurance form.
Cost of builders' risk insurance
Like other insurances, this depends on your specific coverage needs. In general, the cost of building risk insurance varies from 1-4% of the total construction cost. Some factors that insurers look at when calculating costs include:
- Project type
- Coverage amount and employment period
- Materials for construction
Calculating your total construction budget and finding out its 1-4% is an excellent way to get an idea of the lowest and highest political cost.
Ready to get your builders' risk insurance? Contact Us
To learn more about commercial insurance, please contact our team at 860-684-5270 or visit our website at www.paradisoinsurance.com.