Builders Risk Insurance
Builders Risk Insurance—also referred to as course of construction (COC) insurance, building risk insurance, or builder’s risk insurance—is a specialized type of property insurance that protects a person’s or organization’s construction projects, renovations, or installation while in progress. It can include the existing structure, materials, as well as equipment being used in the construction of a building or structure should those items sustain physical damage from a covered cause (up to the coverage limit of the policy). Most insurance providers will also typically cover lost or stolen items.
Coverage begins from the moment the project commences until it is completed. Coverage is typically for the construction phase only and will terminate when the project is completed and ready for use or occupancy. While normally purchased by the owner of the project, insured’s can also be lending institutions or the general contractors that are performing the work.
Who Needs Builders Risk Coverage?
A builders risk policy can be useful in a variety of circumstances. If you are any person or organization that has a vested interest in the project being completed, you need to consider investing in this risk coverage. So who should purchase builders risk insurance?
- Property owners completing a renovation project
- Builders/Contractors completing a project
- Residential construction projects
- Commercial construction (such as office buildings)
- Installation projects
- House flippers
- Development or investment companies
- Retail companies
- Architects or Engineers
- New Construction companies
What Does Builder’s Risk Insurance Cover?
Builder’s risk insurance protects builders against multiple types of problems, including:
- Fire
- Lightning
- Hail
- Explosions
- Theft
- Vandalism
- Hurricanes and other “acts of God”
A Builder’s Risk Policy May Cover:
- Buildings and structures that are under construction, including temporary storage buildings, fencing and scaffolding
- Equipment, such as repair of damaged equipment, as long as the equipment is covered under the policy
- Materials and supplies being used
- Constructions signs, trees and plants
- Valuable papers such as blueprints, and electronic data
- Labor
- Ordinance and law costs, or the increased cost to repair or rebuild due to building codes and laws at the time of the loss