Builders risk insurance provides coverage for a structure during its construction, renovation, or repair process. Property owners and building contractors can benefit from this policy as it offers added protection beyond standard commercial property insurance coverage. Here are some important things you need to know about builders risk insurance.
Written for a Minimum One-Year Term
Builders risk coverage is written for a minimum one-year term, and it is typically renewed at the end of the period. This helps ensure that the builder or homeowner has enough time to complete the work without having to worry about the coverage lapse.
The premium for builders risk coverage is based on the location of the structure, the type of work being done, and the estimated value of the structure. The insurer will also look at the builder’s past experience and reputation when determining the premium.
Coverage Written on Construction-Specific Risk Exposures
Builders risk coverage can be written on risk factors that you are exposed to during construction and may not apply when the building is occupied. For example, a structure that is under construction may require additional coverage for high-value items such as electronic equipment or machinery.
In general, the coverage includes damage caused by theft, vandalism, and other acts of nature. Builders risk coverage can also provide additional coverage for damage caused by floods, fires, earthquakes, and windstorms.
Coverage Ceases When the Structure is Occupied
This means that the coverage will end at the point when the structure is completed and the insured moves in.
It is important to note that the coverage does not automatically transfer to a different type of insurance policy when the structure is occupied. The insured will need to purchase a separate policy to provide coverage for the structure once it is occupied.
Builders risk insurance is an important insurance coverage for those undertaking a construction, renovation, or repair project. While providing coverage for a structure during the construction process it can also provide coverage for certain indirect losses.
Cover the Structures You Are Building with Steve Wilk Insurance
There are a lot of risks involved while a structure is under construction and you must cover yourself in case any mishap occurs. Contact us at Steve Wilk Insurance today to learn more about builders risk insurance and how it can protect your investment.