Whether you’re undertaking new construction, a remodel, or a renovation, a Builder’s Risk policy is an important consideration for residential and commercial properties.
What is a Builder’s Risk Policy?
Designed to cover a property throughout the course of construction, a Builder’s Risk policy offers coverage on an open-peril basis and may include coverage for property at off-site storage locations or during transit.
While Builder’s Risk policy coverage limits are often based on the total estimated completed value of the property, rates for new construction are usually less than completed building rates due to the smaller exposure in the early stages of a construction project.
Learn More: New Homeowner Checklist: Insurance Edition
Who needs this type of policy?
A Builder’s Risk policy is appropriate for any individual or company involved in a construction project, including:
- General contractors
- Subcontractors
- Property owners
- Architects
Explore the Policy: Commercial Property Insurance
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What’s typically covered by a Builder’s Risk Policy?
Due to the unique nature of different construction projects, a Builder’s Risk policy can be customized to fit a wide range of specific project needs. The core of every Builder’s Risk policy, however, is designed to protect structures under construction, and materials and equipment both on-site and during transit. Coverages include:
- Building materials and supplies which will become a permanent part of the building
- Foundations and excavations
- Scaffolding, construction forms, or temporary fencing
- Equipment
- Transit
- Soft costs
Your policy may also include coverage extensions that protect against things like collapse, debris removal, and even fraud.
What is “soft cost” coverage?
An essential feature of a building policy is coverage for “soft costs.” Rather than being attributed to building materials or labor, soft cost expenses arise from a delay in completion due to loss from a covered peril. These may include additional advertising expenses, overtime, and fees for architects. Learn more about the difference between hard and soft costs here.
Did You Know: Central is proud to have an AM Best rating of “A” Excellent.
Explore Your Builder’s Risk Options with Central
A Builder’s Risk policy provides a lot of protection for a small premium. Due to the specialized underwriting required for this exposure, it’s important to contact your Central agents before beginning any new construction or renovation exposure.
Ready to get started? Find an agent to explore your coverage options and set your project up for success.
The information provided in this blog is for informational and educational purposes only and does not constitute legal, insurance, or other professional advice. It is not intended to interpret or modify any insurance policy. Coverage may vary based on individual circumstances, policy language, endorsements, exclusions, and applicable state law.
All descriptions, summaries, or examples are general in nature and may not reflect your specific policy or coverage. No guarantee is given regarding the accuracy, completeness, or timeliness of the information. Your policy contract governs, and you should review it in its entirety to understand your actual coverage.
Nothing in this content creates a broker, agent, or advisory relationship, and you should consult your insurance professional for advice specific to your needs.
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