Many insurance and construction industries experts will tell you that a builder’s risk insurance policy is the foundation of an effective risk management program. This is an added expense, though, so you may be leery of adding yet another thing to understand and pay for. You may be asking questions like do I need builders risk insurance? Can’t I run my company without it? Pronto Insurance is here to help you figure it all out!
Table of Contents
What is Builder’s Risk Insurance?
Do I Need Builder’s Risk Insurance?
Pronto Insurance for all Your Commercial Insurance Needs
What Is Builder’s Risk Insurance?
Builder’s risk insurance, sometimes called course of construction insurance, covers property and construction materials during a renovation or construction project. It is a type of commercial insurance that covers the property on construction sites when it’s destroyed or damaged by fire, wind, vehicle collisions, vandalism, or other accidents.
All builder’s risk insurance policies will cover the building that’s being constructed or renovated. It usually also covers materials that you store off-site that are damaged or lost in transit to the construction site. After that, policies begin to differ. Some builder’s risk insurance policies also cover construction materials stored off-site and cleanup costs, including debris removal.
Some causes of loss that are often excluded from builder’s risk insurance policies are:
- Employee theft
- Work vehicles
- Damage from earthquakes and flooding
- Workman’s comp
- Manufacturing defects
- Flaws in workmanship or design
- Ordinary wear and tear
You’ll need to cover these with a different commercial insurance policy.
Do I Need Builder’s Risk Insurance?
In a word, yes! If you have a financial stake in a building project, you should purchase this business insurance. It is important coverage for anyone with a financial interest in a property that’s being built or renovated, including building owners, architects or engineers involved with the project, as well as contractors or subcontractors.
This isn’t nearly as costly as you may fear! The cost of builder’s risk insurance typically accounts for 1% to 5% of a business’s total construction budget.
It is important to note that this may not be an option for you. It may be required by a mortgage or construction agreement, just like homeowners’ insurance is required if you have a mortgage because the lender doesn’t want to lose what they paid for because the loan is repaid.
Pronto Insurance for all Your Commercial Insurance Needs
Do I need builders’ risk insurance? Who will help me? Can I afford it? These are all common questions. Builder’s risk insurance policies can vary widely from one provider to another. To make sure you get the coverage you need, reach out to Pronto Insurance! We’re well-known in the insurance industry for homeowners insurance, different types of auto insurance, and motorcycle insurance, no matter the make or model of your bike. We provide some of the best commercial insurance as well, including builder’s risk insurance!
