What is Builders Risk Insurance?
Builders risk insurance, which is also called course of construction insurance (COC) is a type of property insurance that is designed to provide temporary coverage against any damage or loss the occurs in the course of a construction project. Builders risk or course of construction COC insurance often covers the structure itself only, or it can be extended to include all building materials on the job site or that are in transit to a site.
Builders risk insurance can be purchased for both new construction and remodeling projects. Builders risk insurance protects against any damage that is done to the insured structure from a wide variety of events. Most builders risk policies cover any property damage from fire, theft, wind, lightning, hail, explosion, and vandalism.
Builders risk insurance policies are usually written for three, six or twelve-month terms. If an insured construction project is not completed by the end of the initial policy's term, the builder's risk policy can be extended, but most carriers will only permit a single extension.
Builders risk insurance is not usually an option for construction projects, especially when they are for new construction. Most local, county, and state building and code enforcement agencies require that a certificate of insurance be available before any construction begins.
Because builder's risk insurance policies are considered high risk for insurers, there are fewer carriers that underwrite builder's risk policies other than for property insurance policies. In spite of this risk, there is still an abundance of markets offering builder's risk insurance. Selecting a builders risk insurance policy for a construction project can be a long and confusing process, so you should make sure to choose a construction insurance broker experienced writing builders risk insurance as well as firms that have experience carrying it. When selecting a policy, be careful to review and understand what the policy covers, the limitations of the policy, as well as its limitations and exclusions.
Whatever your situation might be, you can rest assured that there will be an insurance carrier that will cover your project. After all, even if the companies that carry this type of insurance are fewer in number, they are still available, and although due to their nature the premiums might be higher, they serve a valuable purpose if there is trouble in the course of completing a job.
Regardless of where your project is located, you can be sure that there have been construction projects in your area where builder's risk insurance policies have made an important difference for a builder for a variety of reasons. Don't regret not buying builder's risk insurance policies. The truth is that you can avoid many problems by having the foresight to own this type of coverage. The secret is not only buying it, but also buying it from a reputable agent and insurance carrier.
An insurance agent can help you find the right carrier.