What is builders risk insurance?
Everyone in the construction industry knows how common delays are, and how costly they can be. Builders risk insurance may help contractors working in Pennsylvania from financial costs associated with major delays.
Builders risk insurance offers contractors specialized protections for their construction projects. Policies normally cover delays, as well as certain other risks that contractors face.
When should contractors working in Pennsylvania get builders risk coverage?
Builders risk coverage is broadly recommended whenever Pennsylvania contractors take on larger construction projects. Policies are often obtained for commercial and government construction. Contractors may find that many commercial and government clients require that builders risk be purchased.
Without coverage, contractors might face expensive liability costs if a project is delayed too long. Anytime a major delay would cause serious financial problems, this insurance may be useful.
What’s covered by builders risk policies?
Builders risk policies might cover a variety of things that are at a construction site. Coverage is usually limited to things at the construction site, but many items may be covered:
- Large and specialized equipment
- Smaller and more general equipment
- Specialized and common tools
- Construction supplies and materials
- Completed and in-progress structures
Protections can vary from one policy to another, so it’s important to check the specific provisions within a policy. Contractors should pay special attention to what protections are offered for structures, as policies might cover no structures, completed structures, in-progress structures, or all structures being built.
What risks are covered by builders risk policies?
Builders risk policies can cover many perils that would result in damage or loss of covered items. Some common perils that may be covered include vandalism, theft, fire, smoke, wind, and other risks. A knowledgeable agent can review exactly what a chosen policy would cover.
What construction projects are builders risk policies purchased for?
Builders risk policies are primarily purchased for larger construction projects. Policies are readily available for commercial construction of retail stores, office buildings, warehouses, factories, and other buildings. Government contracts for municipal buildings, special-use buildings, or infrastructure are also usually easy to cover, as are most larger multi-family housing projects.
Are builders risk policies used to insure the construction of a single house?
Builders risk policies are less often used for the construction of just one house. Contractors frequently get policies when building sub-developments or larger multi-family housing. A single house typically doesn’t justify the cost of a policy, however.
If coverage is wanted for an especially large and expensive house, an experienced insurance agent can see what policies are available.
Are contractors able to extend a builders risk policy when there’s a project delay?
Some builders risk policies offer the option to extend coverage if a project is delayed. Any allowed extensions are limited to just one, however, and not all policies have such an option. If a second extension is needed or a policy doesn’t offer an extension option, then a new policy might have to be purchased after a delay.
How much do builders risk policies cost?
The cost of builders risk coverage can vary depending on several factors, such as the type of construction, project size and scope, completion timeline, equipment used, and contractor’s track record.
An independent insurance agent can find out how much different companies will charge for insuring a particular project. Independent agents are able to request quotes from multiple insurance companies, as they aren’t connected with any single insurer.
Where can contractors get builders risk insurance for projects located in Pennsylvania?
If you need help insuring a construction project that’s in Pennsylvania, contact the independent insurance agents at The Miller Financial Group. Our agents will work closely with you to determine coverage needs, and then find a builders risk insurance policy that meets your project’s needs well. Together, we’ll make sure your work is protected.
