BUILDERS RISK INSURANCE

What Is Builders Risk Insurance?

If you are a project owner or a contractor, risk of property damage on a construction site is a significant concern for you. Builders Risk insurance, also known as "Course of Construction", "Construction All Risk", and "Contractor's All Risk Insurance", provides coverage for buildings during the course of construction and, in some cases, for a specified period afterwards.

Insuring your building during the course of construction provides financial protection against loss or damage to the materials, appliances and fixtures which are intended to become an integral part of the structure under construction, as well as the equipment being used during the construction process.

The builder's risk insurance policy will pay for damages up to the coverage limit. The limit must accurately reflect the total completed value of the structure, including all materials and labor costs. The best source for determining the appropriate limit of insurance is the construction budget.

Builders Risk insurance policies can often be written in terms of three-months, six-months, or 12-months. If the project is not completed by the end of the initial policy term, it can often be extended.

What Does Builder's Risk Insurance Cover?

The Builders Risk policy or “Course of Construction” policy is designed to provide broad coverage, however, it does not cover all property connected to the construction project nor does it cover every risk. Damage from the following events will be covered by most Builder´s Risk Insurance policies:

• Fire
• Wind
• Theft
• Lightning
• Hail
• Explosion
• Vandalism
• Vehicles/Aircraft

 In general, standard exclusions and limitations may include:

• Earthquake
• Employee theft
• Water damage
• Weather damage to property in the open
• War
• Government action
• Contract penalty
• Voluntary parting
• Mechanical breakdown

 You can obtain additional coverage through endorsements. Endorsements are tailored coverage designed to provide protection against many of the risks that are not included in a typical Builders Risk policy or “Constructor’s All Risk” policy. Some of these endorsements include:

• Back- up of sewers
• Scaffolding, construction forms, temporary structures
• Scaffolding re-erection
• Bylaws, demolitions and increased cost of construction
• Debris removal
• Fire department charge
• Model home contents
• Pollutant clean-up
• Preservation of property
• Property at a temporary storage
• Property in transit
• Rewards

Applying For Builders Risk Insurance? Have Questions?

Contact our builders risk experts at 1-877-213-4545 or surety@bondsurety.ca