Insurance Built for Construction Projects

Builders risk

Builders Risk Insurance also known as Course of Construction Insurance is intended to protect your business’ buildings, materials, equipment and structures against risks like fire, theft, vandalism, weather-related damage while the building is under construction. Builders Risk Insurance is used by homeowners, contractors, property owners, lenders and developers.

For homeowners, builders risk extends beyond a typical home insurance policy. The key difference is that a homeowners policy protects an occupied house, whereas builders risk protects a building or renovation project in progress. For general contractors, subcontractors and builders, builders risk insurance projects your jobsites, materials and equipment while on site. Property owners and developers can secure their investment while the property is under construction. Lenders utilize builders risk insurance to ensure project continuity in the face of adversity.

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Builders Risk Insurance Experts

Many property owners mistakenly assume that homeowners insurance provides adequate protection for a home under construction or renovation. However, homeowners insurance is not designed to cover construction-related risks. Builders Risk Insurance is specifically tailored to protect buildings under construction, offering more comprehensive protection than a standard homeowners policy.

What You Need to Know about Course of Construction Insurance

Homeowners Insurance Does Not Cover Homes Under Construction or Renovation

Many property owners mistakenly assume that homeowners insurance provides adequate protection for a home under construction or renovation.

However, homeowners insurance is not designed to cover construction-related risks. Builders Risk Insurance is specifically tailored to protect buildings under construction, offering more comprehensive protection than a standard homeowners policy.

Builders Risk Covers Construction-Specific Risks Homeowners Policies Don't

Homeowners insurance typically does not cover construction site related risks like the theft of building materials, like lumber, and wiring, or tools and equipment.

Because parts of homes under construction are exposed to the elements, they are more vulnerable to natural elements like wind, rain and storms. Many renovation and building projects are exposed to a higher risk of fire because of the variety of activities on sites like electrical wiring and welding.

Builders Risk Insurance Covers Beyond the Home & Includes Temporary & Unattached Structures

A homeowners insurance policy does not typically extend beyond the home itself.

Builders risk insurance often extends coverage to and unattached temporary structures, like scaffoldings, trailers and safety fencing.

It also offers protection for materials and equipment stored on-site, in-transit, and even off-site for the duration of the renovation or building project.

Builders Risk Helps to Cover Financial Losses Due to Construction Delays

Homeowners insurance primarily focuses on covering physical damage to an occupied home, but it falls short of addressing various construction-related financial setbacks.

This includes challenges such as delays caused by weather damage or fire, loss of rental income if the property is an investment, and additional interest costs accrued on construction loans.

Homeowners may also incur expenses for architects’ and engineers’ fees when redesigning the property after a loss, which are not covered under standard homeowners insurance policies.

Homeowners Insurance May Void Coverage if Major Renovations Are Taking Place

When renovating an existing home, it's crucial to inform your insurance provider about the changes. Failing to do so can lead to complications with your homeowners policy.

Not notifying your insurer of major renovations could result in your policy being voided. This means you may lose coverage in case of any incidents during or after the renovation.

Major renovations that typically require disclosure include additions, structural changes, and gutting the interior. Always check your policy and consult with your insurance provider before starting any work.

You Can Customize Your Builders Risk Policy For Each Project And Extend It for Project Delays.

Unlike homeowners insurance, which provides standard coverage for completed homes, Builders Risk Insurance is designed to meet the specific needs of individual construction projects.

Policy terms can be adjusted to align with your project timeline, and coverage is extendable in case of delays, ensuring you remain protected throughout your entire construction process. You can also typically enhance your Builders Risk Insurance with extra coverages, such as earthquake or flood protection, equipment breakdown coverage, and soft costs coverage for lost income due to delays.

Renovating? Ask us why you need Builders Risk Insurance or Course of Construction Insurance!

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