A new building reflects an important investment for both individuals and companies. A new or renovated house brings you both added value and better living. A new office or store means increased revenue and new opportunities.
However, blanket property insurance doesn’t cover many of the risks that come with construction. That’s why Acumen Insurance provides builder’s risk insurance, or course of construction insurance, for Hamilton residents and businesses.
What Is Builder’s Risk Insurance?
Builder’s risk insurance protects the rising structure, the building materials that wait or arrive on-site, and the labour involved in the construction process. As the site becomes more valuable, so does the insurance coverage. With builder’s risk insurance, your building site stays protected at every stage of construction.
How Does Builder’s Risk Work?
The builder’s risk policy will provide coverage for damage done to the insured structure from a wide variety of events. Damage from the following events will be covered by most policies:
- Fire
- Wind (may be limited in coastal areas)
- Theft
- Lightning
- Hail
- Explosion
- Vandalism
- Vehicles/Aircraft
You should read your builder’s risk insurance policy to be familiar with its limitations and exclusions. Limited coverage is provided for collapse among other situations.
The following circumstances are generally excluded:
- Earthquake
- Employee theft
- Water damage
- Weather damage to property in the open
- War
- Government action
- Contract penalty
- Voluntary parting
- Mechanical breakdown
An important exclusion which should be read in its entirety excludes coverage for damage from poor execution, including faulty design, planning, workmanship, and materials. These types of issues might be addressed by Professional liability rather than a Builder’s risk. Earthquake and flood coverage may be purchased in some areas.
Contractors or builders can hold a policy on a site, though it must be one or the other. You can choose a policy to last for three-, six-, or twelve-month intervals based on the expected time of construction.
How Much Does A Builder’s Risk Insurance Policy Cost?
This policy will be in the range of one to four percent of the construction cost, but it will depend on the type of coverage and exclusions that the policy will have. The importance of having a solid insurance company is that they will expedite your claims and will help you solve any potential claims during the construction process. Some companies can cover the soft costs of the project, but you will need to ask the insurance company to include it in your coverage but be aware that this might increase the cost of your builder’s risk.
The builder’s risk insurance is part of your project’s soft costs and even though it will cost you some money, it is better to have it than not having it when is needed.
Do You Need an Extension of Builder’s Risk Insurance?
Extensions of coverage may be provided for certain situations. The coverage for these may be limited.
Common builder’s risk insurance coverage extensions include the following options:
- A coverage extension to protect your property from loss while being transported to the job site.
- Coverage is extended to apply to scaffolding, construction forms, and temporary structures, but only while they are at a location you have reported.
- Property that will be used or installed in the secured location and pertaining to the insured company.
- When the fire department is called to save or protect covered property from a covered cause of loss.
- The builder’s risk insurance policy will pay your expenses to remove debris of covered property. This debris must result from a loss that is covered under this form.
- Water damage from the back-up of sewers and drains is usually covered.
- Property in transit
- Scaffolding
- Property in temporary storage
- Fire department service charge
- Debris removal
- Sewer and Drain Backup
- Valuable papers (site plans, blueprints, etc)
Important Notes Related to the Insurance Policy
It is important to highlight this additional information that you should know:
- The insurance will not cover the property of others.
- Sub-contractors are required to have their own insurance.
- There is no coverage for tools or equipment.
- No coverage for professional liability
- It does not cover accidents at the job site.
- Usually, coverage ends when the building is completed or occupied.
- The premium for the annual policy is fully earned.
How Can I Find the Right Coverage?
Acumen Insurance will help you pick the appropriate coverage for your building project. As an independent broker, we have access to a variety of insurance plans. With our selection, so you can find the insurance that is right for you.
Protect your new building with course of construction insurance made for Hamilton. We know how to find the coverage that meets the varied requirements of different building projects. Let us help you design the insurance plan that is right for you. Call (905) 574-7000 to find out more information today.