A Closer Look at Commercial Builders Construction Risk Coverage

Builders Risk Insurance is a type of property insurance that protects the property owners as well as the builders for the projects that are under repair or construction. This type of insurance is very similar to Personal Property and Building coverage. The slight difference is that this coverage is only utilized to cover the buildings while under construction. The good thing about a builders risk course of construction insurance coverage is it covers what you would call an “all risk.” Meaning it protects anything from vandalism to theft, damages and even destruction of property in which the insured has an insurable interest. However, if requested, the contractor association can be named as an additional insured. Now the property can include either the entire building or any structure that is under construction, including the building material which is at the job site but only the ones to be used in the project. The contractor’s tools and equipment are NOT covered and should be insured by that contractor, specifically. Unfortunately, the Builders risk policy does not cover any losses that have occurred prior to the beginning or after the completion of the construction. In order for the coverage to exist, the project must be in progress.

For the limit of insurance, it may equal the full value of the constructed project. At the finishing of the project, an appraisal will be done to update any value changes. There is optional policy coverage you can get at your request such as financial cost, additional interest expenses, leasing & marketing expenses and of course legal & accounting expenses. Flood and quake coverage is also available upon request. Please feel free to contact your builders underwriting agent for details on obtaining builders risk coverage through the Risk Pooling Trust program if your organization is in any construction-related activities.