If you are a builder or a property owner that has any type of renovation project, construction project or repair project coming up, then builders risk insurance is for you. Whereas most insurance policies are not going to cover the assumed risks that are taken during the phases of new construction, the builders risk insurance will cover those varying risks. The policy itself is quite all-inclusive considering that it typically will cover ‘everything’ because of the extraordinary risks that go along with the new construction.
This can include losses from accidents, property damage, theft losses, vandalism and destruction of property as well as other risks of loss. The property being covered under the builders risk insurance needs to be specified. It can be a whole building structure or another structure that is erected during the construction phase. The general contractor, new building supplies and construction materials can all be added to the insurance policy.
There are a few things that cannot be covered; the contractor’s equipment and the contractor’s tools. The time is of the essence in the construction policy because the insurance policy is not applicable for any claims at all before or after the construction is complete. The construction must be in the actual ‘construction process’ for the policy to exist. It is possible to also add on earthquake and flood insurance if there is fear of damage or loss. Subsequently, you may also opt for additional coverage to include the ‘soft costs’ that are absorbed by the construction project.
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