Builders Risk insurance is a special type of property insurance coverage provided to buildings or structures under construction. The coverage is designed to protect construction sites from loss and damage. This coverage helps protect your property and investment from the ground up. Coverage can vary from policy to policy, but a comprehensive policy can cover many different types of loss including:
- Fire
- Wind / Hail
- Lightning
- Theft
- Vandalism
Who Buys Builders Risk Insurance?
- Homeowners / property owners as they build or renovate their property
- Builders
- Contractors
- Developers
- Retail companies
- Schools
Does Builders Risk Insurance Provide Liability Coverage?
Builders Risk Insurance only provides coverage for property damage. It does not provide liability coverage, and it’s only available for owners. If, as a General Contractor, you need liability coverage, you can consider buying a General Liability insurance policy. Since every contractor’s needs vary depending on the specific project, the required insurance coverage can differ as well.
Builders’ Risk vs. Homeowners Insurance. What Is The Difference?
Homeowners insurance is tailored for finished and occupied homes, whereas builder’s risk insurance is specifically designed for homes that are still under construction.
A home being built from the ground up faces unique risks compared to a completed and occupied property, requiring a specialized type of insurance coverage.
Homeowners insurance protects the structure and personal belongings, provides coverage for additional living expenses, and includes liability protection if someone is injured on your property. Builder’s risk insurance, however, covers the property while it’s under construction but typically does not include personal liability protection.
Do All Contractors Have To Get Builders’ Risk Insurance?
Generally, you are not legally required to have a Builder’s Risk Insurance policy. However, without this coverage, many clients may hesitate to work with you. Clients place a high value on this insurance, seeing it as a commitment to protecting their property.
Construction projects carry various risks, including potential financial losses. Holding this insurance provides peace of mind, knowing that these risks are covered. For builders, investing in Builder’s Risk Insurance is one of the best ways to safeguard their business.