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WhatisBuildersRiskInsurance?

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What is Builders Risk Insurance?

InformationofcoverageandexclusionoftheBuilder'sRiskInsurance.
ByJuanRodriguez

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ConstructionExpert

UpdatedDecember16,2014.

WhatisBuildersRisk
Insurance?

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BuildersRiskInsurance,
peoplealsorefertoitas
CourseofConstruction,is
somekindofproperty
insurance.It'saformof
insurance,whichcoversa
buildingwherethebuilding
ispresentlybeing
JustinSullivan/GettyImagesNews
constructed.Itcancoverjust
thestructure,oralsothematerialsonsitewaitingtobeinstalledortransportedtothejob
site.
Thebuilder'sriskinsurancepolicywillpayfordamagesuptothecoveragelimit.
Thelimitmustaccuratelyreflectthetotalcompletedvalueofthestructure(allmaterials
andlaborcosts,butnotincludinglandvalue).Theconstructionbudgetisthebest
sourcefordeterminingtheappropriatelimitofinsurance.

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BuildersRiskinsurancepoliciescanoftenbewrittenintermsofthreemonths,six
months,or12months.Iftheprojectisnotcompletedbytheendoftheinitialpolicyterm,
itcanoftenbeextended,butusuallyonlyonetime.
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WhatDoesaBuilder'sRiskCovers?
Thebuildersriskpolicywillprovidecoveragefordamagedonetotheinsuredstructure
fromawidevarietyofevents.Damagefromthefollowingeventswillbecoveredbymost
policies:

http://construction.about.com/od/Insurances/a/WhatIsBuildersRiskInsurance.htm

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1/6/2016

WhatisBuildersRiskInsurance?

Fire
Wind(maybelimitedincoastalareas)
Theft
Lightning
Hail
Explosion
Vandalism
Vehicles/Aircraft

Youshouldreadyourcourseofbuilder'sriskinsurancepolicytobefamiliarwithits
limitationsandexclusions.Limitedcoverageisprovidedforcollapse.Standard
exclusionsinclude:

MONEY V

Earthquake
Employeetheft
Waterdamage
Weatherdamagetopropertyintheopen
War
Governmentaction
Contractpenalty
Voluntaryparting
Mechanicalbreakdown

Animportantexclusionwhichshouldbereadinitsentiretyexcludescoveragefor
damageresultingfromfaulty:design,planning,workmanshipandmaterials.
Earthquakeandfloodcoveragemaybepurchasedinsomeareas.
Extensionsofcoveragemaybeprovidedforcertainsituations.Thecoverageforthese
maybelimited.

VIEWMORE

Commonbuilder'sriskinsurancecoverageextensionsinclude:

Propertyintransit

Scaffolding

Propertyintemporarystorage

Firedepartmentservicecharge

Debrisremoval

SewerandDrainBackup

Acoverageextensiontoprotectyourpropertyfromlosswhilebeingtransportedtothe
jobsite.

Coverageisextendedtoapplytoscaffolding,constructionformsandtemporary
structures,butonlywhiletheyareatalocationyouhavereported.

Propertythatwillbeusedorinstalledinthesecuredlocationandpertainingtotheinsured
company.

Whenthefiredepartmentiscalledtosaveorprotectcoveredpropertyfromacovered
causeofloss.

Thebuilder'sriskinsurancepolicywillpayyourexpensestoremovedebrisofcovered
property.Thisdebrismustresultfromalossthatiscoveredunderthisform.

Waterdamagefromthebackupofsewersanddrainsisusuallycovered.
Valuablepapers(siteplans,blueprints,etc)

ImportantNotes
Someadditionalinformationthatyoushouldknow:
Theinsurancewillnotcoverthepropertyofothers.

Subcontractorsarerequiredtohavetheirowninsurance.
Thereisnocoveragefortoolsorequipment.
Nocoverageforliability.
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WhatisBuildersRiskInsurance?

Itdoesnotcoveraccidentsinthejobsite.
Usuallycoverageendswhenthebuildingiscompleted,oroccupied.
Thepremiumfortheannualpolicyisfullyearned.

Forspecificterms,coverageandexclusions,theoriginalbuilder'sriskinsurance
policywilldeterminetheapplicablecoverage.

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