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What is builders risk insurance?
Numerous issues can disrupt even the most well-planned construction projects, leading to delays or complete work stoppages. Contractors in Texas can sometimes be held liable for these delays if they're substantial enough. Builders risk insurance may give contractors a layer of protection against the financial ramifications of such disruptions.
Designed specifically for ongoing construction projects, builders risk insurance can offer financial assistance if a covered event interrupts the progress of an insured project.
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Who in Texas should consider builders risk coverage?
Primarily contractor purchase builders risk coverage, and any Texas contractor involved in major construction may need coverage. General contractors, subcontractors and developers all get policies.
Other stakeholders that have an interest in a large construction project might also get builders risk coverage in certain situations. Lenders and property owners may want the coverage, although whether they pay for coverage or require a contractor depends.
Typical Claims Covered
What assets are protected by builders risk policies?
Depending on their terms, Builders risk policies may cover supplies, equipment, and any completed work that gets damaged.
Coverage for equipment, tools and supplies typically applies only when these items are at the project site. Assets that often can be covered include:
- Structures in progress
- Heavy-duty and major equipment
- General-purpose equipment and tools
- Specialized equipment and tools
- Materials and supplies
Coverage for structures in progress could be limited to certain structures under construction, or it could extend to all structures at the project site. A knowledgeable agent experienced in builders risk policies can help contractors verify which structures a given policy would protect.
What kinds of projects can be covered by builders risk policies?
Builders risk policies can be tailored to cover a wide variety of large construction projects, usually including multi-family buildings, larger residential developments, commercial structures, industrial buildings, office buildings, retail structures and more. Coverage can also typically be obtained for public works projects, renovations, additions and major hardscaping or landscaping work.
Policies for single-family home construction are less common, but a specialist agent can look for cost-effective policies that would cover new home construction or extensive remodeling.
What risks are covered by builders risk policies?
The specific risks that are covered by a builders risk policy are defined by the policy's terms and conditions. With appropriate terms, a policy could cover perils such as:
- Water damage
- Other perils
Policies might cover only the perils specifically listed within their terms (i.e., a named perils policy), or generally cover perils unless they're specifically excluded (i.e., an open perils policy).
How much are the premiums for builders risk coverage?
The premiums for builders risk policies vary based on several factors, including the scope of the project being insured. The project's location, the value of equipment, the cost of work, and other details also come into play.
Despite premium variations, however, this coverage tends to be affordable. An independent insurance agent can help contractors compare policies from several insurers to see how affordable coverage for a specific project would be.
How can contractors in Texas secure builders risk insurance?
Although a builders risk coverage can be obtained by itself, it's more commonly included as part of a package policy. A package policy allows contractors (or others) to bundle this with other commercial coverages, allowing for more customized and robust protections. After all, contractors almost always have other coverage needs too.
For help with insuring current or future construction projects in Texas, contact the independent insurance agents at Ramey King Insurance. Our team will help you find a builders risk insurance policy that has all of the protections your project and business need.
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