Frequently Asked Questions
What is "Builder's Risk" or "Course of Construction" Insurance?
Builder's Risk Insurance is a form of property insurance specifically designed to cover buildings under construction. The rates for builder's risk insurance are discounted because there is very little property at risk when construction begins. Builder's Risk Insurance is not a "standardized" coverage form and coverage varies from insurance company to insurance company. BuildersRisk.net is one of the broadest policies available on the market today.
Do you cover theft of building materials?
Yes. While some companies exclude theft coverage until the building is "dried in" and can be locked, BuildersRisk.net provides theft coverage up to the full amount of coverage purchased on the entire structure.
Does builder's risk insurance cover tools and equipment?
As a general rule, Builder's Risk Insurance is designed to cover the building and building materials that will become a permanent part of the completed structure. Contractor's tools and equipment should be covered by a Tools and Equipment Floater Policy.
Does builder's risk insurance include liability coverage?
No. Builder's Risk Insurance is primarilyproperty insurance. Liability coverage is usually purchased under a separate Comprehensive General Liability policy for injuries to the general public or under a Workers Compensation policy to cover workers injured on the job.
Do you cover the replacement cost of the lost or damaged property?
Yes. There is no deduction for depreciation on new construction. BuildersRisk.net pays the cost to repair or replace the damaged property with materials of like kind and quality.
How is builder's risk insurance different from a homeowners insurance policy?
Builder's Risk Insurance is usually less expensive than homeowners insurance because it is designed to cover an unoccupied dwelling under construction. It is a temporary policy with discounted rates. A homeowners policy is a more permanent policy designed to cover an existing home, its contents and the owner's personal liability exposures. In addition to being more expensive, a homeowners policy would not include some of the special construction related coverage extensions found in a builder's risk policy.
Is builder's risk insurance renewable?
It depends. Most builder's risk insurance policies are written on an annual basis and can be renewed if the construction takes longer than 12 months. BuildersRisk.net can cover most structures up to 24 months and larger buildings can be insured for as long as the estimated construction period.
Can I buy builder's risk insurance after construction has begun?
Sometimes, but it is not a good idea to delay coverage. Builder's Risk Insurance has discounted rates because there is very little property at risk when construction begins. If you wait until the structure is being framed and "dried-in" before you buy insurance, the discounted rates are inadequate for the property values at risk when the policy begins. If your project is more than 30% complete, your application will require special underwriting (ie. increased rates or denial of coverage.) If the structure is more than 50% complete, it may be impossible to find insurance coverage that protects you as the building owner.
My builder and my lender both need to be named on my builder's risk insurance. Is there an additional charge for this?
No. With BuildersRisk.net, there is no additional charge for additional insureds and mortgagees. The BuildersRisk.net automated system will issue as many Certificates of Coverage as needed to document the coverage for each insured party.