Builders Risk Insurance

Buildings that are under construction exist in a strange, nebulous area of the insurance world. They cannot be properly covered by a property policy, because they are not yet complete and being put to their intended use, but they also are subject to many of the same risks that finished buildings are. Fire, vandalism and mechanical breakdowns impact unfinished buildings at the same rate that they impact finished buildings, which is why construction companies, owners and investors use builders risk insurance: to guard against these issues having a negative effect on the project.

Builders insurance, which is also known as ‘course of construction’ insurance, is a type of temporary property insurance that only covers buildings for a period between the start and end of a construction project. No two builders liability insurance polices are alike, because no two construction projects are alike. It is typically purchased by a group of people with a financial stake in the construction project, including the building owner or property developer, any contractors or subcontractors hired to carry out the work itself, lenders or external investors, and even engineers or architects. 

So how much does builders risk insurance cost? 

For an important question, this is very difficult to answer. That’s partially because every project has different exposures. For instance, a waterfront property development project in Miami is going to need a very different package than a mall construction in the heart of the Midwestern tornado alley. 

There are also several different ways to customize a builders risk insurance policy that will impact the price. Most builders risk packages include comprehensive general liability and building coverage that covers the workers and the building, as well as any materials, supplies or equipment. However, coverage areas like equipment breakdown or law and ordinance are necessary for some projects, particularly those that use heavy machinery or require a large degree of consultation with a local government or municipality. This additional coverage will drive up the cost of the insurance package, but also ensure that you are not exposed to any unanticipated risks. 

To request a builders risk insurance quote, visit our website or call us directly to talk with an experienced agent. Many builders risk insurance companies do not understand the impact of certain exigencies, nor the fact that all policies must be tailored to the individual needs of the owner, lender or contractor. We look forward to sharing our expertise with you!