Friday, October 16, 2015

Guide to Understanding Builder's Risk Insurance Policies

If you're in the field of construction, contracting, or even property management or development, then you may be wondering about builder's risk insurance and how it actually applies. Here, you can learn more about builder's risk policies, what they protect against, and how they're utilized.
A builder's risk policy is actually property insurance, in essence. It's designed to protect and cover property during construction. This includes new construction, as well as major renovations to existing buildings and properties, both commercial and residential.
As opposed to many other forms of insurance, with builder's risk, short-term policies are available due to the nature of construction and what's being covered. Therefore, three and six month policy periods are quite common here.
Both the materials used and the equipment used will be covered by builder's risk. Additionally, it's important to note that materials and equipment will most typically be covered not only on the construction site, but also on off-site storage for the project, or in transit towards the site.
While this isn't always the case, most typically, builder's risk will fall under an inland marine policy, due to that transportation and storage component addressed above. This is as opposed to commercial property insurance. However, this may vary from provider to provider, and place to place.
Policies also differ in what qualifies as a covered risk. For instance, different types of forces of nature or natural weather, fire, theft, vandalism, and so forth, are all potential areas of risk.
Depending on your locale, you may seek coverage for specific events and risks, such as hurricane season in Florida, or earthquakes, tornadoes or flooding elsewhere. It's important not to assume what is covered and not, but to go through a checklist with your provider to see what they are specifically offering.
Generally, the lead builder, contractor or project manager buys the policy. In the case of renovations to an existing home, the homeowner though may want to personally and directly invest in the policy. This means that any damages would be paid to them directly, which is both more convenient, and helps guard against them not receiving their full benefits.
Hopefully you've learned more about builder's risk insurance and what it really means. Remember, it's to protect actual property during construction, which could include materials, equipment, and more. You'll only need to get it for a short duration of time, so there's flexibility there. Be sure to work with an insurance provider or agent who understands your needs, and can help you get the ideal form of coverage.
John Rothschild is the owner of ACI Insurance Services, a leading provider of Florida commercial insurance and surety bonds for more than 10 years. ACI is known for their customer service, their extensive experience and knowledge of the industry, and their affordable rates, and they'll do everything they can to meet the needs of their clients.

Posted By: Bruce Johnson Residential Contractor Inc.

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