Builder's Risk Policy
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Product Summary
A Builders Risk policy covers a building in the course of construction or renovation. Builders Risk is a type of Inland Marine insurance. Covered property includes the building, building materials in transit or at a temporary location, soft costs and rental income.
What's Covered?
The policy covers the costs of labor and materials for new construction. In addition to the actual building, the policy covers property such as temporary structures, fencing, scaffolding and construction signs. Loss or damage to trees, shrubs, sod and plants is covered for specific perils such as fire, theft, and motor vehicle collision. If damage is caused by defective workmanship, materials or design, the policy will cover the resultant damage. Mechanical breakdown coverage can be included for losses caused by testing certain types of equipment. Valuable Papers coverage is often included to protect blueprints and other construction documents at the job site. The Builders Risk policy covers the Insured’s responsibility for materials and property owned by others at the job site. A Builders Risk policy also covers the financial loss resulting from a new ordinance or law. Some Builders Risk policies protect the profit the contractor has earned.
What Isn't Covered?
Seizure or destruction of property by order of governmental authority is not covered. The policy does not cover loss caused by the settling or cracking of walls, ceilings or floors. Acts of destruction or theft by employees are not covered.
What Affects the Cost of the Policy?
The total value of the construction or renovation project drives the cost of the premium. The type of construction and where the property is located are also factors impacting the premium.