Contractors face risks in the construction business, as damage caused to projects underway can be costly. To protect against this type of loss, all contractors need builders risk insurance. Yet builders insurance protects more than just an unfinished structure; it is an essential type of business insurance that construction companies need for every project.

Why Contractors Need Builders Risk Insurance

Building contractors deal with many risks while completing building projects. Builders risk insurance covers the perils that can affect a project before it is completed, which normal business insurance will not cover until a building is finished. While projects are underway, there is often the possibility of weather damage or any type of financial loss that can happen when things do not go as planned. Insurance that covers a builders risk during construction can protect the time, money, and effort invested in a building project. If a loss occurs, contractors and project owners can finish the project without sacrificing their investment.

What Does Builders Risk Insurance Cover?

Primarily, builders risk insurance covers damage to construction projects that are in the process of being built; however, it does provide other important coverage that contractors need:

  • Damage to Structures - Damage or destruction to buildings being built caused by fire, storms, wind, and other weather-related causes. Flood and earthquake insurance may not be included, although riders for both are usually available.

  • Theft - Theft of building materials and supplies, as well as contractor tools and equipment from construction sites.

  • Vandalism - Vandalism to buildings under construction that results in losses.

  • Accidents - Some policies may cover accidents that occur at the building site that are not covered by other insurance, such as contractor's business liability insurance.

  • Soft Costs - Financial losses caused by delays in completion of a building project such as the need to reapply for permits, having to update a building to certain upgraded codes, added interest on loans; loss of income, and other non-physical losses.

Getting the Best Builders Risk Insurance

To obtain the proper coverage for a construction project, contractors can choose from either an All Risk policy, which covers all perils other than what is specifically excluded, or a Named Perils policy, covering only perils named in the contract. A policy should start when building materials are delivered to the project site and continue until the project is complete and regular business insurance coverage begins. Policies are available in short terms of 3, 6, and 12 month contracts and can be extended, if necessary. Above all else, contractors should make sure they understand how their builders risk insurance policy works, what is and isn't covered, claim limits, and how claims are handled and paid.

Business insurance that includes specific builders risk insurance is something every contractor needs to protect their investment in expensive building projects. With the right builders insurance, devastating losses are covered and contractors can finish building projects for project owners. To discuss a specific project or overall business insurance needs, contractors should speak with an agency experienced with builders risk policies before that next project is ready to start!

Looking For Builders Risk Insurance In Bryan Texas?

Jones & Associates Can Handle Your Business Insurance Needs!

Contact (979) 599-7532!

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