Builder's risk insurance, also known as Course of Construction Insurance, is an insurance policy that provides financial coverage for buildings and structures that are under construction.
Most commonly, builder's risk insurance is taken out by the owners of the property, although general contractors may also purchase the insurance. The coverage provided by builder's risk insurance is often tailored to the specific building project. In this guide, we go over what it can cover and what isn't included.
How Does Builder's Risk Insurance Work?
Builder's risk insurance is an insurance policy that provides coverage for property damage or loss during the course of a construction project. It helps to protect the property owner and contractor against potential losses due to natural disasters, theft, vandalism, and other causes.
What Does it Cover?
Builder's risk insurance covers the cost of materials, labor, and other expenses associated with the project. It is important to note that this type of insurance does not cover liability or property damage caused by the contractor or their employees. The coverage and exclusions of the policy are tailored to the specific project and the contractor’s individual needs.
What Are the Exclusions?
Builder's risk policies usually do not cover any costs related to the consequences of a loss. To be protected from these additional costs, a policyholder should look into coverage extensions such as debris removal and demolition and increased cost of construction. These extensions can help to cover the costs of clean-up, demolition, and any additional costs due to changes in laws and regulations.
In general, this type of insurance covers physical damage to buildings and other property during the construction process. However, certain exclusions can apply, such as damage caused by flood, earthquake, or intentional destruction.
Additionally, some policies may exclude coverage for property that is in transit, or for specific materials or components of the construction project. It is important to read the policy carefully to ensure you understand all the exclusions and what is and what is not included.
How Much Does it Cost?
The cost of builder’s risk insurance will depend on a few factors, such as the size of the construction project, the type of materials and labor used, and the location of the project. The policyholder will also need to consider the deductible amount, the coverage limits, and any additional coverages or exclusions that may be included in the policy.
Finding the Right Policy
Finding the right policy for a builder's risk insurance can be a daunting task. It is essential to understand the coverages and exclusions of the policy, as well as the risks associated with each coverage in order to make the best decision for your business. It is important to research the different types of policies available, as well as the different levels of coverage offered.
It is also important to review the exclusions of the policy, and make sure that any potential risks are covered by the policy. By taking the time to evaluate the different policies, you can find the one that best meets your business’s needs and provides the best protection.
Conclusion
Finding the right policy for builder's risk insurance is an important task. It is important to research the different types of policies available, understand the coverages and exclusions, and evaluate the risks associated with each coverage in order to make the best decision for your business.
J.F. Shaw Insurance Agency can help you find the right policy for your business. We offer builders risk insurance in Georgia to protect and cover your construction projects. Get in touch with us today to learn how.