If your company is providing construction services, you may want to consider the benefit of securing a builder’s risk policy. This is the financial protection for projects that involve renovation or construction activities. It can help cover the cost of loss when fire, vandalism, theft, or weather is the root cause. While it can hard to estimate a dollar figure for what a policy would cost you, the industry average falls between 1% and 4% of whatever the total cost of the construction project would be.
According to the team at Daniels, the builder’s risk coverage can apply to either the property owner, the contractor, the lender, or other subcontractors performing work at a location. Most often, the policy is purchased by the contractor or the property owner. However, all insured parties should be included as named insured on the policy.
A quick run-down of the policy is as follows:
It protects insurance interests during the construction period.
Coverage is specified for a length of time.
The insurance can pay for equipment, fixtures, materials, and the structure under construction destroyed by covered risks.
Losses excluded from coverage include occurrences of employee theft and extreme weather or nature-related incidents.
A general liability policy leaves gaps in coverage when it comes to unique risks exposed through insurable interests. Although it is one party that secures the coverage, the benefits are usually in the best interest of the others involved in the project.