Builders risk insurance is a specialized type of property insurance designed to protect buildings and structures under construction. This temporary policy covers a range of potential hazards, including fire, theft, vandalism, weather-related events, and accidents. Coverage typically lasts from the start of construction until the project is completed and ready for use.
Builders risk insurance protects the building, materials,
supplies, and equipment on-site. It also covers expenses due to construction delays, such as additional loan interest, real estate taxes, and leasing expenses. Additionally, it protects materials and equipment in transit to the construction site and once they are installed in the structure.
To ensure coverage is effective and claims are not denied, insurance carriers often demand specific compliance factors. Adequate security measures, such as fencing, lighting, and surveillance, must be in place to prevent theft and vandalism. Proper fire protection protocols, including fire extinguishers, sprinkler systems, and fire-resistant materials, are also required. Adherence to Occupational Safety and Health Administration (OSHA) standards and other relevant safety regulations is mandatory to reduce the risk of accidents and injuries. Regular site inspections and maintenance checks must be documented to ensure ongoing compliance with safety and quality standards. Detailed documentation of all construction processes, materials, and changes to the project is essential for verifying claims and ensuring transparency.
Many people may not know that builders risk insurance can also cover losses from faulty workmanship or design errors, provided these issues lead to direct physical loss or damage.
For more information on Builders Risk Insurance, reach out to your insurance broker.