As a contractor, you may have heard about the importance of having a builder’s risk insurance in the construction industry. It is categorised under property insurance. Builder’s risk insurance is used to cover the costs of any damages that may occur to the property that is under construction. This type of insurance covers any liabilities that may be incurred during construction and protects builders from financial losses. There are various other reasons why it’s so important for construction workers to have builder’s risk insurance. Keep reading to find out.
Insurance for construction projects
- Provides workers with financial protection
Contractors must have builder’s risk insurance as it covers up any financial losses of those workers who are actively participating in a project. It is possible to avoid any damage from occurring to the structure they’re working on, but it’s not possible to fully negate them. There are also chances of something happening to the crew or the contractor of the project. In any case, builder’s risk insurance offers workers protection.
- Covers up material costs
Builder’s risk insurance also covers the costs of damage to materials that are being used for the project. In case the materials used are destroyed or stolen, you can easily file a claim for them and get compensation for it. This will allow you as a contractor to not worry about any additional expenses that may occur on a project that you’re investing in. One question that most contractors have is, what does builders’ risk coverage provide? Apart from financial protection from on-site theft and accidental damages to the property by workers, builder’s risk insurance covers fire damages or any damages to the property due to unforeseen weather circumstances. This includes freezing rain damages, snow damages, damages to the property being scorched by a nearby fire, and so on.
- It’s relatively affordable
Compared to most other insurance plans, builder’s risk insurance is relatively cheaper. This makes it more accessible to contractors who are either constructing a new property or renovating an old one.
What’s not included in builder’s risk insurance?
Builder’s risk insurance policies will vary from company to company. However, some exclusions occur in a builder’s risk insurance, such as not covering earthquake-related damages. Various companies offer add-ons to cover damages from specific events. It’s best to consult with your insurance provider to find out which plan will be perfect for you.
What should I look for when choosing a builder’s risk insurance plan?
Always go for an insurance policy that lasts throughout your construction process. You don’t want to end up paying high damage costs because your insurance plan wasn’t long enough to cover any damages that occurred at the end of the project. It’s also essential to read every line of the terms & conditions provided so that you know what you’re signing up for. Have a good understanding of all the plans available, and try searching for plans online. You’re more likely to come across someone who purchased a plan similar to the one you require and read their reviews about it. Try not to rush into this process, as you must have the right builder’s risk insurance plan for your project.
Having builders’ risk insurance can be quite beneficial to contractors, especially if they’re looking to mitigate any losses and damages incurred during construction. Not only does it save you money but it also ensures everyone is kept safe. The most important thing for anyone working in construction is that they have that added layer of protection.
Thanks for reading.