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Because every construction project is unique, each builder’s risk policy is different. You can customize your policy to fit your project’s needs by getting coverage extensions.
Builder’s Risk Insurance, also known in some areas as Course of Construction, is a unique kind of property insurance. It’s a form of insurance that covers a building where the building or insured area is presently being constructed. It can cover just the structure, or also the materials on-site waiting to be installed or transported to the job site and is a type of insurance that most owners will ask every contractor to carry.
The builder’s risk insurance policy will pay for damages up to the coverage limit. The limit must accurately reflect the total completed value of the structure (all materials and labor costs, excluding land value). The construction budget is the best source for determining the appropriate limit of insurance.
Property damage Coverage
Your construction property can get damaged by any unspecific event like fire, explosion, hail, etc and you become liable for the same.
A builder’s risk insurance policy helps protect your construction projects from certain kinds of property damage. It can also help cover additional soft costs, or expenses not directly related to construction, if property damage causes a delay. This can include lost sales, rental income, additional interest on loans and real estate taxes.
Debris removal Coverage
The debris can be a major issue if you are into construction of buildings and other structures.
Debris removal coverage covers the cost of clearing and disposing of the debris and materials from a covered loss, which can often be a massive expense. Some insurers will also cover demolition costs if remaining parts of a damage structure must be torn down.
Law / Local ordinance changes Coverage
There can be a possibility that the rules, regulations and other laws change during your construction project and make an impact on the same.
If a law or local ordinance changes during the construction project, this policy protection will cover the added costs of complying with the new laws, plus the costs of any delays that the new compliance adds to the project.
Labour expenses Coverage
There can be instances where your labour expenses increase due to commitments and labour strike for increase in wages.
Some policies will cover the additional labour costs that result from a covered loss; others will offer that coverage as an optional extension. Almost all insurers will offer this form of coverage.
Material Cost escalation Coverage
There can be a possibility that you gave a quotation for a construction project but the material prices increased due to changes in the economy.
This protects the policyholder from any major increases in cost of materials and services that occur during the course of the project. If unforeseen economic changes lead to a drastic change in cost for certain materials, this policy extension covers that cost.
Damage from the following events will be covered by most policies:
A builder’s risk insurance policy helps protect your construction projects from certain kinds of property damage. It can also help cover additional soft costs, or expenses not directly related to construction, if property damage causes a delay. This can include:
Because every construction project is unique, each builder’s risk policy is different. You can customize your policy to fit your project’s needs by getting coverage extensions.
This is where confusion often arises. A contractor might ask: ‘Why do I need builder’s risk insurance when I have contractor’s general liability insurance?’ While on the surface the two coverages may seem similar, they play very different (but equally important) roles.
While builder’s risk insurance covers the contractor’s property or equipment during construction, the contractor’s general liability insurance policy covers bodily injury, property damage and any resulting liability that may arise from possible accidents. It protects contractors if they’re accused of causing injury or property damage.
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It might be time to switch insurers whenever the service that your existing insurer provides doesn’t meet your needs. For example, if you have a poor claims experience or an unexplained rate increase, it might be time to consider other options
If you cancel a previous policy before a new policy is effective, you could run into some serious financial problems.
Contact us today to help you with multiple options to choose from.
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