What is a builder’s risk insurance policy?
A builder's risk insurance policy is a type of insurance that provides coverage for buildings and structures that are under construction or renovation. It is also known as course of construction insurance. This type of insurance is designed to protect the interests of the property owner, contractor, and other parties involved in the construction project.
Builder's risk insurance typically covers the following:
Property Damage: Coverage includes damage to the insured structure and its materials from perils such as fire, theft, vandalism, wind, lightning, and other specified risks.
Materials in Transit: It may cover materials and equipment while they are in transit to the construction site.
Soft Costs: Some policies may cover additional costs beyond the actual construction, such as architect fees, engineering fees, and other "soft costs."
Debris Removal: Coverage may extend to the cost of removing debris resulting from a covered loss.
Coverage Period: The policy is usually in effect for the duration of the construction project and ends once the project is completed and ready for occupancy.
It's important to note that builder's risk insurance generally does not cover the liability of the contractor or property owner for bodily injury or damage to the property of others. Liability coverage is typically provided by other types of insurance, such as general liability insurance.
Builder's risk insurance is crucial for all parties involved in a construction project to ensure that they are protected financially in case of unexpected events or accidents during the construction process. The specific terms and coverage of a builder's risk insurance policy can vary, so it's important to carefully review the policy and understand its limitations and exclusions.
