Construction, renovation, and expansion projects often involve significant investments in materials, labor, equipment, and project scheduling. Builder’s risk insurance is commonly reviewed to help address certain property-related exposures that may arise during the course of construction.
As projects progress, materials, equipment, and site conditions can change throughout different phases of construction. Reviewing builder’s risk coverage in advance may help identify areas that deserve additional consideration based on the size, scope, and nature of the project.
Structures under construction may be exposed to a variety of conditions, including fire, theft, vandalism, wind, lightning, and other covered causes of loss. Coverage terms, limitations, deductibles and qualifying causes of loss can vary significantly between policies and projects.
Questions to Consider About Builder’s Risk Insurance
Project Responsibilities
• Who is responsible for arranging builder’s risk coverage during construction
• Are owners, lenders, contractors, and subcontractors properly identified on the policy
• Should the insurance section of contracts be reviewed to better understand insurance responsibilities and requirements
Materials & Property
• Are building materials covered while stored on-site
• Is coverage available for materials stored off-site or while in transit
• Are temporary structures, fencing, scaffolding, trailers, or job site equipment included
Construction Costs & Project Timing
• Have current construction costs been considered when selecting limits
• What happens if the project completion date changes
• Are there limitations involving delays, vacant structures, or suspended work
Weather & Site Conditions
• Does the policy address windstorm or other weather-related exposures
• Are separate deductibles applicable for hurricanes or named storms
• Are there restrictions or limitations that apply during certain weather events or seasons
Theft & Security Considerations
• Are theft-related losses involving copper, fixtures, HVAC equipment, or stored materials addressed
• Are there conditions involving unsecured job sites or temporary storage areas
• Are there requirements regarding how materials are stored or protected before installation
Cost of Insurance Considerations
Insurance costs for builder’s risk coverage can vary depending on the project value, construction type, location of the project, construction materials, project duration, and the stage of construction involved.
Additional factors such as coastal exposures, windstorm considerations, theft exposures, project delays, vacant structures, temporary structures, and the insurance requirements contained within construction contracts may also influence underwriting considerations and overall insurance costs.
Coverage structures, deductibles, policy limits, covered causes of loss, and carrier requirements may vary depending on the nature of the project and the insurance carrier involved. Reviewing project details periodically may help identify changes that deserve additional consideration as construction progresses.
Builder’s risk coverage is commonly reviewed based on the type of construction project, project value, materials involved, and the contractual responsibilities between parties. Coverage terms and conditions may vary depending on the policy structure and project details.
At Insurance With Purpose Agency, Inc., we work with contractors, developers, builders, and property owners to review available coverage options based on the nature of the project and the insurance provisions contained within project contracts.
If you would like to review how this coverage applies to your property insurance program: Dominique Renaud, Insurance With Purpose Agency, Inc.
