Builder’s Risk Insurance Coverage
Builder’s risk insurance can safeguard you from a wide array of potential damages. Some examples include:
Natural disasters: Fires, lightning strikes, hailstorms, strong winds, smoke, explosions, collisions, earthquakes, and hurricanes among others. Material damages: Misplaced or defective building materials, project plans or blueprints, and temporary structures like fencing, scaffolding, signs, retaining walls, and trailers. Furthermore, this insurance may cover equipment costs, such as maintaining or purchasing new tools, and financial losses due to project delays relating to rental income, loan interest payments, real estate taxes, or sales revenue.Builder’s Risk Insurance Exclusions
It’s essential to remember that builder’s risk coverage won’t cover every aspect of your project. As a result, you may need to consider extensions or additional insurance policies to ensure comprehensive protection. Some potential damages that may require extra coverage include:- Conflict-related damages
- Workers’ compensation claims
- Wear and tear
- Terrorism and acts of war
- Employee theft
- Corrosion and rust
- Mechanical failures
- Damages resulting from poor design
- Craftsmanship and materials
Cost of Builder’s Risk Insurance
Builder’s risk insurance typically costs 1-4% of the total construction project budget. So, for instance, if your project has a $200,000 budget, you could expect to pay between $2,000 and $8,000 for insurance coverage.
