Builder’s Risk Insurance: An Overview
Builder’s risk insurance, also known as course of construction insurance, is a specialized type of property insurance designed to protect buildings under construction. It provides coverage for damage to the structure and materials caused by risks such as fire, theft, vandalism, and certain weather events. This policy is essential for property owners, contractors, and developers to safeguard their financial investment during construction projects. Central Carolina Insurance Agency provides builders risk insurance in Davidson, NC, Mooresville, Huntersville, Concord, NC, Kannapolis, Salisbury, NC and surrounding areas.
Coverage and Benefits
A builder’s risk policy typically covers:
Building Structure: Damage to the building under construction.
Materials & Equipment: On-site, in transit, or temporarily stored materials.
Soft Costs: Additional expenses due to delays, such as architectural fees, permits, and loan interest.
However, standard policies often exclude coverage for earthquakes, floods, employee theft, and faulty workmanship unless specifically added through endorsements.
Who Needs Builder’s Risk Insurance?
Property owners
Contractors and builders
Developers
Financial institutions funding the project
Duration and Cost
Policies generally last for the duration of the construction project, from groundbreaking to completion. The cost varies based on project size, location, and coverage limits, typically ranging from 1% to 5% of the total construction cost.
Why It’s Important
Without builder’s risk insurance, unexpected damages can lead to significant financial losses, project delays, and legal complications. This policy ensures that projects stay on track and protects stakeholders from potential risks.
For comprehensive protection, policyholders should tailor coverage based on project needs and work with an insurance expert to understand exclusions and endorsements.
If you have any questions, please do not hesitate to call us.
