Builders’ Risk Insurance is a policy designed to provide coverage for buildings while under construction. It covers the contractor’s interest in materials at the job site before they are installed; materials in transit intended for the job; and the value of the property being constructed, until it is completed and accepted by the owner. The policy may be written to cover the whole structure for new construction or the cost of remodeling and renovation projects. It can also be used to cover specific projects, such as a new room addition, a deck, or a remodeled bathroom.
Builders’ risk insurance is typically written in the name of the contractor or the property developer; but it could also be written in the name of the property owner, if he is responsible for insuring the property while it is under construction. Both commercial and residential construction sites could be covered under a builders’ risk insurance policy.
There are also additional built-in schemes for the specialized needs of a particular construction project, whether it’s commercial or residential. Often, insurance companies request a certain level of builder experience before they provide insurance coverage for their commercial sites. Usually, an experience level of 2-3 years in commercial construction is desired. If any damage to construction material occurs in transit or during storage, then this cost could also be covered under a builders risk insurance policy.
An additional option that can be added with builders’ risk insurance coverage is movement of earth. If the construction is extremely large, then the cost of moving earth from the digging site could amount to a great deal.
A builders’ risk insurance policy is essential for people who have a financial interest in property construction, either commercial or residential. It doesn’t mean only new construction, but also any remodeling or renovation project.
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