Construction Insurance
What You Need to Know
Construction insurance helps protect your project or contracting business from the risks and hazards of the industry. James Campbell can help provide you with the flexibility you need to choose the right level of insurance so your business is covered no matter what happens.
Course of construction insurance, or builder’s risk insurance, is designed to cover your construction projects from start to finish. Construction can be a long and difficult process, there are many risks involved in a commercial construction project. From more simplistic jobs like custom home builds to more complex commercial risks like industrial, and high-rise buildings you need a commercial policy that covers your unique set of risks. During the construction process, you need to safeguard your project with construction insurance. Builders risk insurance will help protect you against many things such as direct damage to the project such as a fire while under construction as well as things like project interruption costs, and wrap up liability insurance.
What is construction insurance?
Construction insurance or builder’s risk insurance is a specific type of insurance that is meant to protect your building and liability for the entire duration of the project. Both home and business owners are typically required to insure their project with this type of policy because property claims can cost a pretty large sum of money in most cases.
A construction project will usually require a builder’s risk insurance policy for:
- New commercial build construction;
- Recreation & Sports centers
- New home construction
- Adding a second story or additions on the property; or
- Any major renovation projects
Construction Insurance Coverage
Construction insurance gives your project protection from start to finish. This means coverage begins from the bidding stage all the way to completion once the building is occupied. Construction insurance will specifically cover the building, construction materials, and liability in the event of any physical loss or damage caused by an insured event. For example, fire, theft or vandalism.
Your builder’s risk insurance policy can be tailored to your needs to ensure that you have the proper coverage every step of the process.
Key coverages may include
- Property Coverage
- Project Interruption Costs
- Pollution & clean up removal
- Wrap up liability insurance
- Completed operations
For more information about your coverage and it’s limitations, please contact your insurance broker.
The Cost of Builder’s Risk Insurance
The exact cost of your builder’s risk insurance policy will differ based on the project and the services offered. The premium will be determined based on several factors related to the construction business and what type of construction work is being done. Some examples of the factors involved are:
- The location of the business;
- The size of the business;
- Your past insurance claims records;
- The duration of the construction project;
- Or types of operations on-site such as demolition, tunnelling, drilling, snow removal or mining.
Construction insurance would benefit anyone who conducts business by offering construction services or operations. For example, these kind of services and operations include:
- Commercial construction companies
- Developers
- Custom home builders
- Commercial builders
- Contractors doing renovations and builds
The responsibility of securing builder’s risk insurance to cover a construction project is usually the property owner’s responsibility. Once you finalize the details of your construction project, be sure to identify who will be responsible for purchasing the policy and make sure that all parties involved are covered.
Builder’s Risk Insurance Coverages to Consider
Here are some examples of coverages, should your project require builders’ risk insurance:
Project Interruption Costs
Covers soft costs extra expenses and loss of rents as a result of a delay due to direct physical loss at a project or site
- The completion of your new commercial building is delayed due to a fire on site, as a result the scheduled completion date has been missed. The project interruption costs coverage will include coverage for the reduction or rental income due to the delay.
Completed Operations Period
Different companies offer completed operation coverage with different time periods. These time frames can range from 12 to 36 months.
- After the completion of your construction project the building suffers a loss from a burst pipe. The cause was determined to be a faulty pipe installation during the original construction of the building. If your policy has completed operations coverage for the timeframe of the loss the resulting damage oof the burst pipe would be covered.
Other features of this policy may include coverage for:
- Property in storage at another location
- Extra and expediting expenses;
- Fire suppression system recharge expense
- And more.
What is the difference between property insurance and builder's risk insurance?
While they may seem similar at first glance, builder’s risk insurance is a special type of property insurance which will cover you for the entire duration of the new build or renovation project. It can cover buildings under construction, materials, and/or liability in the event of loss or damage due to insured perils like fire, wind, vandalism, explosion or slip and falls.
Will I need a builder’s risk policy if I already have contractor’s insurance?
Typically, yes. A contractor’s insurance policy will not cover any buildings under construction. It is imperative that you cover your building and liability during the project.
Let James Campbell Insurance Help You with Your Construction Insurance Today
At James Campbell, we put you first. Our clients are our top priority and the backbone behind everything we do.
We can help provide you with protection from insuring your first car, your first home or business or even giving you protection during your retirement travels. Whatever you need coverage for, we’ve got your back. We will make sure that you are ready to live a life free of stress or worry so you can focus on life’s important moments each and every day.
James Campbell Insurance Brokers have been taking care of our members for over 40 years. This is why we are able to make insurance easy by offering you the right solutions at the right times. Our solutions are tailored to fit your individual needs, no matter what they may be.
FAQs
If you are interested in lowering your insurance premium, speak with your insurance broker about the following:
- Increasing your deductible (your share of the cost of a claim). By increasing the amount of the deductible you are willing to pay, you will decrease your premium;
- Dropping your collision coverage on an older car;
- Bundling your car and home insurance with other types of insurance with the same insurance provider;
- Buying a car with a lower-cost insurance rating.
For an Auto Insurance quote, your driver’s license number, insurance history and driving records are important factors in getting an accurate quote. For a Home Insurance quote, details on the home, such as year built, square footage, style of home and updates on the roof, electrical, heating, and plumbing are all important factors in determining the premium. Additional factors, such as acreage, swimming pools and ponds all play a role in determining the coverage you will need along with the premium.
