Understanding Builder’s Risk Insurance

Posted: March 13, 2020

Millions of dollars are spent on construction in South Carolina each year. From rebuilding after tropical storms to adding real estate to a growing community, construction is the foundation of our culture and economy. But, like all major projects, construction comes with significant risk. For anyone involved with a building project, obtaining and understanding builder’s risk insurance can help mitigate risk and give you peace of mind so you can focus on the job at hand.

At King Street Agency, we can help you find the builder’s risk insurance coverage for your needs so you can keep your business protected. Request a quote today.

What Is Covered By Builder’s Risk Insurance?

In the early stages of a construction job, the property is chosen and the equipment and materials are delivered to the site. The cost of working on the property, purchasing the materials, and renting the equipment is significant, and any interruptions can delay construction.

Builder’s risk insurance covers many potential problems, depending on your provider. Some of the most common exposures it covers include:

  • Fire damage
  • Wind
  • Theft of building materials
  • Vandalism
  • Ordinance and law
  • Business income
  • Damage to fences and signs
  • Earthquake

Who Needs Builder’s Risk Insurance?

Although a variety of people can purchase builder’s risk insurance, it’s typically the property owner or builder who obtains it. Since it’s the property owner who assumes the risk for new buildings or upgrades, they also have the most to gain from ensuring their building risk is covered.

Situations That Are Covered Under Builder’s Risk Insurance

Building a new structure is the primary situation that’s covered under builder’s risk insurance, but the coverage isn’t just limited to that. Installation and remodeling projects are also eligible for builder’s risk coverage.

Common Problems Facing Builders

Depending on the location, weather conditions, and the project itself, you may face a variety of factors that threaten your completion time:

Theft and Vandalism

It’s important to note that some locations are far more vulnerable to theft and vandalism than others. Projects can take weeks or months to complete, and the building materials for the project are often stored on building sites. This gives thieves ample opportunity to damage or steal building materials which can take a toll on your plans.

Weather Damage to Vulnerable Building Materials

No matter where you’re building site is located, weather can be unpredictable. An unexpected storm or tornado can wreak havoc on your structure and can even damage the materials you’re leaving onsite. While we can’t control the weather, getting coverage will provide you with a peace of mind until you complete your building project.

Damage From Accidents and Fires

Even if your most skilled team is working on your construction, they’re still human, and humans make mistakes. A new worker bumping into a loosely constructed wall can set your project back, especially if materials are damaged.

Additionally, the threat of fire is always real, and it can come from various sources. From a worker tossing his partially-lit cigarette to a gas line rupturing, fire can erupt where you least expect it.

What Is Not Covered By Builder’s Risk Insurance?

While many risks are covered by builder’s risk insurance, some important factors must be covered by a different policy. Some aspects that are unprotected by the builder’s risk coverage include:

  • Accidents and injuries to workers
  • Liability
  • Tools and equipment

Builder’s Risk Insurance vs Contractor General Liability Coverage

Builder’s risk insurance covers many of the concerns builders face, but not all of them. Other important factors are covered by contractor general liability coverage. To ensure that all of the major risks are covered, property owners may want to invest in both types of coverage. Here’s a summary of what’s covered under both types of builder’s insurance:

Builder’s Risk Insurance

  • Covers theft and vandalism that affects your building materials
  • Covers accidental damage to your building structure
  • Covers weather-related damage to your property

Contractor General Liability

  • Provides protection for 3rd party bodily injury or property damage
  • Protects against negligence

Cover Your Building Project at King Street Agency

Any expensive, long-term building project comes with an element of risk. Theft, weather, and accidental property damage can set back your plans and cost you thousands. However, understanding and obtaining builder’s risk insurance can keep your project on schedule despite any unexpected setbacks.

Our agents at King Street Agency will help you decide the exact type and amount of coverage that’s right for you. Contact us to set up an appointment at your convenience, or request an online quote today.

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