Accidents happen; when a loss occurs to a building under construction, that loss can affect many people. This includes anyone from the people who own the building and money lenders, to the construction company that is in charge of the building project. To protect against loss during the construction process, every building should be covered by insurance provided by a knowledgeable builders risk insurance agency. Whether the construction company purchases this insurance, or a policy is purchased in the form of business insurance by the building owner, builders risk insurance protects everyone in the event of damage or loss during the construction process.

Who Needs Builder’s Risk Insurance?

Builder’s risk insurance protects all those with a financial interest in a new construction project. It provides protection from damage and loss caused by perils named in the policy. These policies are purchased from a builders risk insurance agency whenever there is an insurable risk, which means that construction has been started on a new building. Builder’s risk insurance policies should be taken out by either the building owner, bank or finance company, or the construction company itself to protect all parties should some type of loss occur. Many construction companies prefer to purchase these policies themselves to cover their investment and effort in the project, and to make sure the right type of coverage is purchased.

What Does Builder’s Risk Insurance Cover?

Commercial builder’s insurance covers against damage, destruction, and other similar losses that result from a covered peril. This can include anything from storm damage or fire, to theft and vandalism. All-risk policies cover nearly any damage cause or destruction, with the exception of any specifically named exclusions. Some policies also cover what are called “soft costs.” These costs are financial losses caused by delays in a project due to a covered loss, such as filing for new permits, lost income, and more. It is important for a company to understand what coverage is offered with various policies, and whether they need to add coverage riders for other specific risks.  

Policy Term Length

Since builder’s risk insurance only covers a building while it is being constructed, this coverage is available in shorter terms than most other insurance. A policy is usually taken out for three, six, nine, or twelve month time periods; however, the coverage can be prolonged if necessary should a venture take longer than anticipated.

Getting the Right Coverage

Builders business insurance should be taken out before building supplies arrive and remain until the building is complete, at which point the building owner should already have their own property insurance. Although builders business insurance protects against many perils, most policies do not automatically include coverage for earthquakes, flood and wind damage, or injuries and accidents at the site. All of these risks should be covered under a separate rider. It is critical for the person who takes out such a policy to accurately estimate the amount of coverage that is needed. This is because a policy will only pay out up the amount established in the policy, regardless of the true cost of the damage. This could seriously affect an underinsured project that suffers a substantial loss.

To obtain the right coverage for a commercial building project, the building company or owner should discuss the project with an experienced local builders risk insurance agency. Builders risk business insurance is a necessity for those in the process of constructing a new building to protect all involved in this project. Should a loss occur, builder’s risk insurance can help get a project back on the road to completion as quickly as possible!

Looking For A Builders Risk Insurance Agency In Bryan TX?

Jones & Associates Offers Builders Insurance For Your Needs!

Contact Them Today At (979) 599-7532!

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