If you are planning/designing, or working on a renovation, remodel or new construction, have you considered the right type of protection for the property or renovation during the process? As you know, you can always anticipate the unexpected situation that may damage the work as its being done, so you need to take the proper action before beginning work on residential and commercial properties. A Builder’s Risk policy is designed to give generous protection for those projects for a nominal fee.
Builder’s Risk Policy Explained
This coverage is devised to provide protection for a property (residential or commercial) throughout the construction or renovation process. For example, when doing new construction or installation, losses can happen that may create damages to HVAC equipment, new fixtures, the property, or other materials. This type of add-on coverage should be considered for those type of loss situations that may occur in the process of new construction, installation, and/or renovations. This type of endorsement provides coverage on an open-peril basis during the course of the construction/renovation project and the coverage limits are typically calculated on the estimated completed value of the property. Keep in mind that the rates for new construction (in the beginning stages of construction) are typically less than the completed building rates, due to a lower risk exposure in the initial stages of the project.
Considerations for Needing This Type of Coverage
If you are wondering whether you need to consider a Builder’s Risk policy, let it be known that it is suitable for any person or company involved in a construction project, including:
- Property owners starting a new construction, renovation, or remodel project
- Contractors (general and subcontractors) involved in the project
- Anyone who has a vested financial interest in the project such as a financial institution that is loaning money for the job expenditures
- Architects/Engineers who are taking a role in the design and/or layout of the project
- Commercial/Residential building developers
Protection Provided Under Builder’s Risk Coveraage
The good news is that depending on the type of project you are planning to undertake, this coverage can be customized to fit a variety of your unique project needs. It is designed to protect materials and building equipment being used or stored both on-site and off-site, as well as during transit. It also provides the needed protection for the structure(s) being installed or constructed during the project time. Coverages include, but not limited to:
- Foundations and excavations
- Equipment
- Building materials and supplies
- Soft costs- These types of expenses originate when a covered peril occurs resulting in a delay in the job completion. Some examples may include loss of rental income that may arise due to a delay in the project, overtime, and additional advertising costs. Soft cost coverage provides reimbursement during the time period of delay until the actual date of completion following a covered loss.
- Scaffolding and temporary barriers
- Transit
Your policy may also include coverage extensions that allow further protection. It is recommended before beginning any type of construction job/renovation, you contact your local independent Alabama insurance agent to discuss your job so that you can custom build the protection you specifically need.
Burkett & Associates is Here to Discuss Your Coverage Options
A Builder’s Risk policy may be what you need but contact us today and we can explore your coverage options to ensure your next building or renovation project goes smoothly and gets the right type of protection should a covered loss happen. We are here for all your residential and/or commercial Alabama insurance needs. Don’t wait! Call us today at 256-704-7400.
