What is Builder's Risk Insurance?
What does Builder's Risk Insurance cover?
Most policies will cover damage from the following events:
A)Â Fire
B)Â Wind (may be limited in coastal areas)
C)Â Theft
D)Â Lightning
E)Â Hail
F)Â Explosion
G)Â Vandalism
H)Â Vehicles or aircraft
Why is Builder's Risk Insurance important?
A builder’s risk insurance policy helps protect your construction projects from certain property damage. It can also help cover additional soft costs or expenses not directly related to construction if property damage causes a delay. This can include:
A)Â Lost sales
B)Â Rental income
C)Â Additional interest on loans
D)Â Real estate taxes
Because every construction project is unique, each builder’s risk policy is different. You can customize your policy to fit your project’s needs by getting coverage extensions.
What's the difference between Builder's Risk Insurance and Contractor's General Liability Insurance?
This is where confusion often arises. For example, a contractor might ask: ‘Why do I need builder’s risk insurance when I have contractor’s general liability insurance?’ On the surface the two coverages may seem similar, but they play very different and equally important roles.
While builder’s risk insurance covers the contractor’s property or equipment during construction, the contractor’s general liability insurance policy covers bodily injury, property damage, and any resulting liability that may arise from possible accidents. In addition, it protects contractors if they’re accused of causing injury or property damage.
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