Whether you are building new construction, a remodel, or a renovation, a Builder’s Risk policy is an important consideration for residential and commercial properties.
What is a builder’s risk policy?
Designed to cover a property throughout the construction period, a Builder’s Risk policy offers coverage on an open risk basis and may include coverage for property in off-site storage or in transit.
While Builder’s Risk policy coverage limits are often based on the total estimated finished value of the property, new construction rates are typically lower than completed construction rates due to the lesser exposure in the early stages of a construction project.
Read more: New Homeowner̵7;s Checklist: Insurance Edition
Who needs this kind of politics?
A Builder’s Risk policy is suitable for any individual or business involved in a construction project, including:
- General contractors
- Property owner
Explore the policy: Commercial property insurance
What is usually covered by a Builder’s Risk Policy?
Due to the unique nature of different construction projects, a Builder’s Risk policy can be tailored to suit a wide range of specific project needs. However, the core of any Builder’s Risk policy is designed to protect structures under construction, and materials and equipment both on site and in transit. Coverages include:
- Building materials and supplies that will become a permanent part of the building
- Foundations and excavations
- Scaffolding, structural forms or temporary fences
- Soft costs
Your policy may also include coverage extensions that protect against things like collapse, debris removal, and even fraud.
What is “soft cost” coverage?
An essential feature of a building policy is cover for ‘soft costs’. Rather than being attributable to construction materials or labor, soft costs arise from delay in completion due to loss from a covered peril. These may include additional advertising costs, overtime and architects’ fees. Learn more about the difference between hard and soft costs here.
Explore your builder’s risk options with Central
A Builder’s Risk policy provides a lot of protection for a small premium. Due to the specialized underwriting required for this exposure, it is important that you contact your central agents before starting any new or renovation exposure.
Ready to start? Find an agent to explore your coverage options and set your project up for success.