Understanding Builders Risk Insurance

An essential protection for general contractors, builders risk insurance is the backbone of all projects under construction. Definitely not a “one size fits all” approach, policies vary depending on the size and scope of the project.

What is Builders Risk?

Builder’s risk policies are in effect from the time a project begins to when the work is completed. It covers property loss from risks that oftentimes can’t be prevented, such as fire, lightning, hail, explosions, hurricanes, theft and vandalism. Earthquakes and floods are usually excluded, but the policy can be extended if you’re working in a vulnerable area. Standard exclusions for builders risk are for most things that can be avoided, such as damage to faulty workmanship, wear and tear, and mechanical breakdowns.

What types of property does builders risk cover?

A basic policy will cover both commercial and personal developments that are under construction, including all tools and equipment that are onsite or in transit. Depending on the policy and carrier, it can also cover the soft costs you incur from covering a covered loss. For example, a covered loss causes a delay in construction which amounts to lost income and increased rental periods for equipment.

If something is not covered under a standard policy, it may be included by means of an extension or endorsement.

Who needs builders risk coverage?

Anyone who has a financial interest in the project being completed. This includes the general contractor, sub-contractors, and the property owner. If there was a loan taken out to fund the project, the lender may require coverage and needs to be named under the policy.

How much does builders risk insurance cost?

The cost for a builders risk policy depends on the size and scope of the project. The construction budget is the best source for determining the limit for insurance. Higher limits will result in a higher premium. Policies can be written for three, six or twelve month terms.

To find out how you can obtain a builders risk policy for your next project, request an appointment online or call John Quinn at 617-612-6533.

John began working at H&K Insurance in September 2017. With over 30 years’ experience in the insurance industry, John Quinn is armed with the knowledge and experience to fit your unique needs. He specializes in writing comprehensive insurance policies for general contractors, landscapers, and restaurant owners. Keeping your interests at the forefront of his mind, John works with insurance companies to create policies that fit the philosophy and scope of your business. Affordable and detailed are two traits that aptly describe the policies he writes. In his spare time, he enjoys taking trips to the Cape and volunteering at his local animal shelter.