Basics of Builder’s Risk Insurance
When most people hear ‘builder’s risk insurance,’ they think of specialized coverage. While it is specific coverage, builder’s risk insurance can cover a wide variety of risks that builders and others involved in construction may not have thought about. It is a type of property insurance that covers buildings during the course of construction. It helps to protect the insured against damage or loss of equipment, materials, fixtures, and more during the construction or renovation process. To help you understand this coverage, here are a few facts you should know.
There are two types of key policies to consider:
- Special or all-risk: This policy protects against all perils, subject to exclusions listed by the insurer.
- Specific peril: Offers coverage to protect the site only against the specific perils named on the policy.
Who receives coverage:
- The owners
- The contractors
- The subcontractors
- The lienholders or lenders
Note that they are only covered to the extent of their respective insurable interests in the project.
What coverage consists of:
- Property that has become (or will become) a permanent part of the building.
- The scaffolding, cribbing, falsework, and other temporary structures on the site.
Common policy exclusions:
- Faulty materials and workmanship
- The land and the land values
At Nahai Insurance, we can help you understand the ins and outs of builder’s risk insurance. We offer broad coverage that allows your construction site to remain protected, as well as your finances. To get started on your tailored policy, contact our expert team today.