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Builders Risk Insurance Basics

house under construction

Construction and building projects are complicated with no shortage of things that can go wrong. It is essential to have the proper insurance in place, especially with everything that can happen during the construction process. Of all the different insurance coverages to consider, builders risk insurance is one of the most essential for companies in the construction industry.

A builders risk insurance policy, can also sometimes be referred as course of construction insurance, it is important, very complex and easily misunderstood. In today’s post we would like to examine what you need to know about builders risk policies and how it can protect your company.

What Is Builders Risk Insurance?

Builders Risk Insurance is a specialized type of property insurance that is intended to provide the protection to buildings and structures under construction. This policy protects project owners, general contractors and subcontractors against a direct physical loss or damage to the covered property.

In many cases, a builders risk policy provide coverage for materials and supplies that are on-site, in transit and being stored temporarily at off-site locations if they are intended to become a permanent part of the building or structure. Builders risk policies can also be written to include coverage for loss of income and additional expenses. This is a coverage that would apply if the completion of a project is delayed due to property damage caused by a covered cause of loss.

Builders risk coverage is a temporary form of insurance. Coverage only applies during the course of construction, erection and fabrication. Builders risk insurance coverage stays in force until the construction project is accepted by the project owner or once construction is considered complete. Once the construction is complete, it is up to the owner of the building or structure to secure a traditional property insurance policy.

You should also keep in mind that there is no standard form of builders risk insurance. Policies can vary between insurance companies and in many instances, the coverage terms of a builders risk policy can be negotiated. In many cases, builders risk policies are written on an “all risk” basis. This means that coverage applies for all causes of loss except those specifically excluded by the policy.

construction ladder

What Am I Protected From?

Builders risk insurance can cover a wide range of cause of property damage. The exact parameters of your policy may vary, but in general, an insurance policy includes coverage for the following causes of property damage:

  • Fire
  • Wind
  • Hail
  • Theft
  • Lightning
  • Explosion
  • Impact by vehicle or aircraft
  • Vandalism

It’s important to look over your policy carefully to make sure you are aware of what is and what isn’t covered under your builders risk insurance. This kind of insurance policy often do not provide coverage for property damage caused by flaws in design, planning or workmanship. While the exclusions vary from policy to policy, the following cases of loss are typically not covered under a builders risk policy:

  • Property damage caused by employee dishonesty or theft
  • Property damage cause by earthquakes
  • Act of war
  • Government actions
  • Mechanical breakdowns

Contact R.C. Keller & Company Today

Builders risk insurance is a necessary coverage for many businesses. R.C. Keller & Company is here to help you with your construction industry insurance needs. Protect your project, your wallet and your company by contacting us to discuss a builders risk insurance policy today.

We have provided quality insurance to contractors in Schaumburg and surrounding areas since 1910. R.C. Keller & Company will tailor the specific insurance needs to your business and make sure there are no gaps.

Give us a call today 847-907-4520


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