Have You Considered Builders Risk Insurance?

 In Blog, Business Insurance, Home Insurance

There are different kinds of insurance policies available for different types of risks. One such policy is the builder’s risk insurance, which helps protect construction companies or builders from issues that may crop up during the building process. Most experienced construction companies get a comprehensive insurance plan to protect their interest. Here’s a look at what you can expect: 

Builder’s Risk 

Understanding insurance plans

It is vital to understand the different options you have to protect your home’s construction.

A building is uniquely vulnerable during the construction process. It is more likely to experience accidents, vandalism, and other such problems. If incidents happen, they can cost a lot of money and even bring a project to a halt. Experts recommend general contractors to have a dedicated insurance policy. All subcontractors should also have insurance coverage to work on a project.

It is a general contractor or building owner’s responsibility to ensure all of their subcontractors have sufficient coverage. Some of the most prominent risk categories include design, environmental, external, organizational, project management, right of way, and construction risks. 


Every builder’s risk insurance plan offers a different kind of coverage, so contractors must choose a policy carefully. It is never a good idea to cut corners on insurance because you may have to spend money out of the pocket if something goes wrong. Here’s a look at what is covered by these policies:

  • Man-made Disasters – Man-made disasters like fire, broken mains, explosion, blackouts, or serious accidents are covered by most insurance policies.
  • Natural Disasters – Natural disasters like storms, hail, lightning, floods, are also covered by this insurance plan.
  • Property Damage – Property damage to components like scaffolding, fencing, construction materials, machinery, equipment, signs, temporary structures, signs, and other such essential elements are covered by insurance.
  • Labor Expenses – Builder’s risk insurance plans cover lost labor expenses and wages, as well.
  • Damages from Third-Party Errors – Damages caused by flawed construction material, poor craftsmanship & design, and other such issues.

You must review all plan conditions and exemptions carefully to make sure it offers adequate coverage. Inadequate coverage is just as bad as no coverage on major construction projects.


Protect yourself when renovating your home.

Get a good insurance coverage plan to protect your workers.

All renovation insurance plans have some exemptions or conditions. Study all the plan options carefully to determine whether you can live with these exemptions. Here’s a look at some of the most common exclusions:

  • Earthquakes
  • Contract penalties
  • War or serious conflicts
  • Employee theft
  • Water damage
  • Government action
  • Mechanical breakdown
  • Employee vandalism
  • Voluntary parting
  • Weather damage to open property

These are just some of the many exemptions to consider. Some policies may have different conditions based on the location. For example, in areas that are especially prone to earthquakes, an insurance company may offer additional coverage to handle damage caused by earthquakes. Consult with an expert or compare the different options available in the market to know more.

If you want to know more about insurance, need advice, or wish to compare different options, join AAI Central today! You can reach us through our contact us form.

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