Builders Risk Insurance
What is builders risk insurance?
In the simplest terms, builders risk insurance (also known as course of construction or inland marine coverage) insures a structure while under construction.
A builders risk policy can cover a variety of projects, offering standard coverages and optional endorsements to tailor coverage for almost any residential or commercial course of construction project. A builders risk insurance policy is often required to comply with government regulations or as a condition to meet banking or other contractual arrangements.
A standard builders risk policy does not typically provide coverage for workplace accidents and injuries or liability coverage. Stand-alone premises liability insurance for slip-and-fall accidents may be secured in addition to course of construction coverage.
What does builders risk insurance cover?
Course of construction insurance is designed to protect job sites from loss and damage. While exact coverages and limitations vary between providers, comprehensive builders risk policies may offer coverage for the following (but not limited to):
- Property damage
- Theft
- Vandalism
- Fire or lightning
- Arson
- Collapse
- Windstorm or hail
- Materials in transit
- Debris removal
- Backup of sewers, drains or sumps
Depending on the coverage form, project type and total completed value, your client may purchase a number of other endorsements, including flood and earthquake in some states, to expand the already extensive builders risk insurance coverage, subject to underwriting guidelines.
Who needs builders risk insurance?
Almost every individual or entity with a financial interest in a completed course of construction project is eligible to purchase a builders risk insurance policy, including personal and commercial lines consumers.
Eligible clients for commercial or residential builders risk policies – all of which can purchase the policy in their name, include:
- Homeowners / property owners
- House flippers
- Builders
- General and subcontractors
- Retail companies
- Policy features, benefits and terms remain the same, no matter who is identified as the insured. However, types of available builders risk policies vary by client type.
When should builders risk insurance be purchased?
Demand for a builders risk policy is often time sensitive. Most purchases occur prior to or on the date of construction when the contract is finalized, which means you’ll need to act promptly when your client requests about builders risk insurance coverage.
In some cases, your client might begin construction without securing builders risk coverage, you will need to provide the percentage of construction completed during the application process, in addition to the total completed value. Projects greater than 30% complete are eligible through our program but subject to additional underwriting review.