Builder's Risk Insurance is a policy is designed to provide coverage for buildings while they are 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 remodeling a bathroom.
Builder's risk insurance is usually in the name of the contractor or the property developer, but it could also be in the name of the property owner, if he/she is responsible for insuring it while the property is under construction. Both commercial and residential construction sites might be covered under a builder's risk insurance policy.
There are also additional built-in parameters for the specialized needs of a particular construction project, whether it’s commercial or residential. Often, insurance companies request a certain level of experience of the builder before they provide insurance coverage for their commercial sites. Usually, an experience level of 2 to 3 years in commercial construction is desired.
An additional option that can be attached with builder's 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 builder's 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.
If any damage to construction materials occurs in transit or during storage, then this cost could also be covered under a builder's risk insurance policy.