Understanding Your Builder’s Risk Insurance Policy Period
Regardless of their size or location, construction projects can present complex insurance issues. If you are confused about your exposures and policy options, know that you are not alone. To help you understand the basics of builder’s risk insurance, read on.
Builder’s risk insurance is a type of property insurance designed to cover property throughout its construction, including renovation and repair. This coverage is purchased by either the property owner or contractor, although all parties that have property involved in the project should be named in the policy, such as the owner, contractor, subcontractor, and others. Keep in mind that builder’s risk insurance only covers the property – it does not provide coverage for worksite injuries, design or construction defects.
Many get confused about when coverage begins and ends. Typically, the policy inception date would be the date the contracts are signed. However, there may be a restriction on when coverage begins, so always read through your policy and ensure you understand it. Prior to any preparation, demolition, or delivery of materials, review your coverage to make sure there are no restrictions on coverage inception.
Builder’s risk policies can contain provisions that terminate coverage prior to policy expiration. The provisions may state that the coverage will end if the policy is canceled, the property is accepted by the purchaser, the construction project is abandoned, or unless specified otherwise.
Have questions regarding your builder’s risk insurance? Talk to the team at Nahai Insurance Services! We can help you secure the right coverage for your needs today.