Understanding Builders Risk Insurance: What It Covers

Understanding Builders Risk Insurance: What It Covers

December 13, 2023

Understanding Builders Risk Insurance: What It Covers

Builders Risk Insurance is a crucial safety net for anyone involved in construction projects. Whether you're a homeowner building your dream house or a contractor managing a commercial development, understanding what Builders Risk Insurance covers is essential for protecting your investment. In this blog, we'll break down the key components of Builders Risk Insurance and shed light on what it covers.

What is Builders Risk Insurance?

Before we dive into coverage details, let's clarify what Builders Risk Insurance is. Builders Risk Insurance, also known as Course of Construction Insurance, is a specialized policy designed to safeguard construction projects. It provides coverage for various risks and perils that can occur during the construction phase, ensuring that your project stays on track and within budget.

What Does Builders Risk Insurance Cover?

  1. Property Damage: Builders Risk Insurance primarily covers property damage. This includes protection for the structure under construction or renovation, materials, and equipment on the job site. Common perils covered include fire, windstorm, theft, vandalism, and more. If any of these events damage your project, your policy will step in to cover the costs of repair or replacement.

  2. Soft Costs: Beyond physical damage, Builders Risk Insurance often includes coverage for soft costs. These are expenses that continue to accrue even if construction is halted due to a covered loss. Soft costs may include architectural and engineering fees, permits, legal fees, and interest on construction loans.

  3. Temporary Structures: If your construction project involves temporary structures, such as scaffolding or fencing, Builders Risk Insurance can provide coverage in case of damage or theft.

  4. Debris Removal: In the event of a covered loss, debris removal costs can be significant. Builders Risk Insurance typically covers the expense of removing debris resulting from a covered event.

  5. Additional Coverage Options: Depending on your policy and specific needs, you can often add endorsements for additional coverage. This might include coverage for pollution, flood, earthquake, or other perils that are not typically included.

What Builders Risk Insurance Doesn't Cover:

While Builders Risk Insurance is comprehensive, there are certain exclusions and limitations to be aware of. Common exclusions may include damage due to faulty workmanship, normal wear and tear, and certain perils like earthquakes and floods (unless endorsed). It's crucial to review your policy carefully and consider additional coverage options for any gaps in protection.

Who Needs Builders Risk Insurance?

Builders Risk Insurance is essential for various parties involved in construction projects, including:

  • Homeowners building or renovating their homes.
  • Contractors managing construction or renovation projects.
  • Developers overseeing commercial, residential, or industrial developments.
  • Lenders providing financing for construction projects.

About Craig Barbee, CEO of Barbee Jackson Insurance

Craig Barbee is the CEO of Barbee Jackson Insurance, a trusted name in the insurance industry. With years of experience and a deep understanding of the unique insurance needs of construction projects, Craig is committed to helping clients protect their investments. When you choose Barbee Jackson Insurance, you're choosing a partner dedicated to your project's success.

Understanding what Builders Risk Insurance covers is essential for anyone embarking on a construction project. It offers peace of mind and financial protection in case the unexpected happens. When considering Builders Risk Insurance, it's crucial to work with an experienced insurance provider like Barbee Jackson Insurance, where Craig Barbee and his team can tailor a policy to your project's specific needs. By doing so, you can ensure that your construction project stays on track, and your investment remains secure.