If you’re in construction, you know how to cover all the bases to ensure a job well done. But you also carry risks that are unique to your work. Make sure you protect yourself with the addition of builders’ risk insurance.
Seasoned builders understand that strange and unexpected events can occur when building or remodeling for a client. Challenges like extreme weather, stolen materials, and unforeseen delays can kill your timeline and cost money.
While builders’ risk insurance won’t stop these setbacks, it can offer some peace of mind in a stressful situation. With adequate coverage in place, you have protection when issues arise.
At Lake Region Insurance Agency, we take pride in working with our area’s builders. It’s an honor and an investment in our community to help protect our neighbors. Contact us today for a free quote and to discuss how you can protect your bottom line.
What Is Builders’ Risk Insurance?
Also called “course of construction insurance,” a builders’ risk plan is a specific type of property policy for those in construction. It typically covers materials and property during construction and renovation projects. The policyholder can receive reimbursement for the physical loss of these items due to a covered event.
The construction business is highly variable from contractor to contractor, and no two construction projects are the same. Your insurance agent will help you create a unique policy for your project’s needs. A customized builders’ risk plan gives you the coverage you require without charging you for items that don’t apply to your situation.
Some of the typical events that can trigger a builders’ risk claim include:
- Theft
- Vandalism
- Natural Disaster (“Act of God”)
- Explosion or Fire
- Material Damage in Transit
Theft is the most likely situation that builders face. Materials and equipment valued at about one billion dollars disappear from construction sites every year. So having as much coverage as possible is crucial for protecting your investment and livelihood.
Besides covering the materials, your policy may cover “soft expenses” such as loss of income and debris removal.
Typically, you will choose between policies that cover ground-up construction, installation, or renovation. Be sure to spend time with your agent going over all of your needs and concerns to get the best policy for your protection.
They will likely discuss several questions with you before setting up your policy:
- What types of exposure will your site have at each phase of work?
- Do you have scaffolding?
- Will valuable documents, such as blueprints, be on-site?
- Is the project residential or commercial?
Many variables come into play with this type of insurance. Your agent will help you choose a policy to cover what you need.
Not Just for the Builder
If you have any stake in a construction or remodeling project, you may be eligible to buy builders’ risk insurance. It’s actually not only for the builder, and many people don’t realize that.
Talk with your insurance agent about this protection if you are in any of the following roles:
- Builder
- Architect
- Homeowner
- Investor
- Lender
- Subcontractor
It is always better to be safe than sorry, and looking into your eligibility for a builders’ risk policy is a smart move. If you are eligible to purchase coverage, you will appreciate the protection and peace of mind.
Why Do Homeowners Need Builders’ Risk Policies?
If you are in the process of watching your new house taking shape, congratulations! New construction is the perfect way to get exactly what you want in a home.
It’s important to know that your homeowner’s insurance likely will not cover the structure until it is complete. During construction, theft, vandalism, or a sudden wind storm could cause damage and loss that has no coverage.
Check with your contractor to find out what level of insurance they carry and what it covers. In most situations, it’s wise for the homeowner to also buy a policy to ensure sufficient protection.
Exclusions In a Builders’ Risk Policy
As with any insurance plan, a builders’ risk insurance policy will have items or events that do not have coverage. You may need to consider separate riders or plans.
Generally, standard builder policies do not cover the following:
- Machinery and Equipment
- Injuries
- Employee Theft
- Subcontractors
- Other People’s Property
- Earthquake Damage
- Your Vehicle
- Workmanship and Professional Liability
Make sure you discuss all of your needs with your insurance agent. In most cases, you likely need liability and workers’ compensation plans in place, too. Construction is too risky of an undertaking to leave yourself unprotected.
One thing to clarify before buying a policy is whether or not it will cover your tools. Different providers vary in what protection they offer for tools. Some do not include them at all in a builders’ risk insurance plan. Others provide coverage for tools that are on the insured site.
Talk with your independent insurance agent to make sure you have sufficient protection for your situation.
Let’s See How We Can Serve You
Our Lake Region Insurance Agency clients are our neighbors. It’s an honor to serve the Greater Minnesota community by meeting their insurance needs.
From individuals to businesses, we have policies that fit the bill. We look forward to learning about you as we create a policy that will give you confidence.
For over 50 years, Lake Region has provided personalized insurance options to our community. As independent agents, we can give our clients service without an agenda. Our team does not have to select policies only from one provider. We can search hundreds of choices to find the right plan for you.
Your home, auto, business, and health deserve all the protection possible. When you work with our agents, you get high-quality service and unparalleled expertise.
With offices in New London, Willmar, and Cokato, MN, we are readily available to meet your insurance needs. Please stop by one of our locations or our website today to get a free quote. We look forward to hearing from you.