List of Construction Insurance
Construction insurances are required on every single construction project. Construction insurances can provide coverage for material, risks, natural disasters, employees and even your own business. However, the insurance industry along with the construction industray are always looking to comprehend and provide the latest coverage on every single and unique situation. Here you will find the most common insurances used in the construction industry.
Builder’s Risk Insurance, people also refer to it as Course of Construction
Is known as a kind of property insurance. It's a form of insurance, which covers a building where the building is presently being constructed. It can cover just the structure, or also the materials on site waiting to be installed or transported to the job site.
The builder's risk insurance policy will pay for damages up to the coverage limit. The limit must accurately reflect the total completed value of the structure (all materials and labor costs, but not including land value). The construction budget is the best source for determining the appropriate limit of insurance.
Builder’s Risk insurance policies can often be written in terms of three-months, six-months, or 12-months. If the project is not completed by the end of the initial policy term, it can often be extended, but usually only one time.
What Does a Builder's Risk Covers?
The builders risk policy will provide coverage for damage done to the insured structure from a wide variety of events. Damage from the following events will be covered by most policies:
Extensions of coverage may be provided for certain situations. The coverage for these may be limited.
Common builder's risk insurancecoverage extensions include:
Some additional information that you should know:
For specific terms, coverage and exclusions, the original builder's risk insurance policy will determine the applicable coverage.
The builder's risk insurance policy will pay for damages up to the coverage limit. The limit must accurately reflect the total completed value of the structure (all materials and labor costs, but not including land value). The construction budget is the best source for determining the appropriate limit of insurance.
Builder’s Risk insurance policies can often be written in terms of three-months, six-months, or 12-months. If the project is not completed by the end of the initial policy term, it can often be extended, but usually only one time.
What Does a Builder's Risk Covers?
The builders risk policy will provide coverage for damage done to the insured structure from a wide variety of events. Damage from the following events will be covered by most policies:
- Fire
- Wind (may be limited in coastal areas)
- Theft
- Lightning
- Hail
- Explosion
- Vandalism
- Vehicles/Aircraft
- Earthquake
- Employee theft
- Water damage
- Weather damage to property in the open
- War
- Government action
- Contract penalty
- Voluntary parting
- Mechanical breakdown
Extensions of coverage may be provided for certain situations. The coverage for these may be limited.
Common builder's risk insurancecoverage extensions include:
- Property in transit A coverage extension to protect your property from loss while being transported to the jobsite.
- Scaffolding Coverage is extended to apply to scaffolding, construction forms and temporary structures, but only while they are at a location you have reported.
- Property in temporary storage Property that will be used or installed in the secured location and pertaining to the insured company.
- Fire department service charge When the fire department is called to save or protect covered property from a covered cause of loss.
- Debris removal The builder's risk insurance policy will pay your expenses to remove debris of covered property. This debris must result from a loss that is covered under this form.
- Sewer and Drain Backup Water damage from the back-up of sewers and drains is usually covered.
- Valuable papers (site plans, blueprints, etc)
Some additional information that you should know:
- The insurance will not cover the property of others.
- Sub-contractors are required to have their own insurance.
- There is no coverage for tools or equipment.
- No coverage for liability.
- It does not cover accidents in the job site.
- Usually coverage ends when the building is completed, or occupied.
- The premium for the annual policy is fully earned.
For specific terms, coverage and exclusions, the original builder's risk insurance policy will determine the applicable coverage.
1. Liability Insurance
Liability Insurance
Liability insurance will protect contractors, home builders and remodelers against injuries, accidents or property damage suffer on the job. While working on construction projects, workers can accidentally damage a property mishandling materials and tools, or while remodeling process is under way.
Common business standards require you to provide evidence of construction liability insurance before repairing or remodeling homes. Sub contractors also are required to present their evidence before entering or starting their participation in a construction job.
Residential Building
This insurance is essential on the home building business, because sometimes homeowners may want to sue contractors for damages occur during the construction process. Or in the event of injury, workers may want to file litigation against the homeowner or contractor. Having good construction liability insurance protects builders from lawsuits or when they suffer loss from unexpected conditions.
Your contract must required every sub to have expedited their own liability insurance and having you exempt of responsibility from any damage that they might produce during the construction progress. The amount of the liability insurance is directly related to the amount of money that the contractor is executing, and it is recommended to have an insurance coverage of two or three times the amount of construction project budgets.
Commercial ContractorsUsually commercial contractors are expected to have multi-million insurance coverage’s, allowing covering any related injury or damage due to the construction. Normally, commercial contractors with higher risk of damages, for example, roofing contractor, or contractors who perform on high specialized trades are the ones with the biggest insurance coverage. Indemnity corporations charge policy holders a modest down payment and monthly fees to finance premiums over six months to a year.
Liability insurance will protect contractors, home builders and remodelers against injuries, accidents or property damage suffer on the job. While working on construction projects, workers can accidentally damage a property mishandling materials and tools, or while remodeling process is under way.
Common business standards require you to provide evidence of construction liability insurance before repairing or remodeling homes. Sub contractors also are required to present their evidence before entering or starting their participation in a construction job.
Residential Building
This insurance is essential on the home building business, because sometimes homeowners may want to sue contractors for damages occur during the construction process. Or in the event of injury, workers may want to file litigation against the homeowner or contractor. Having good construction liability insurance protects builders from lawsuits or when they suffer loss from unexpected conditions.
Your contract must required every sub to have expedited their own liability insurance and having you exempt of responsibility from any damage that they might produce during the construction progress. The amount of the liability insurance is directly related to the amount of money that the contractor is executing, and it is recommended to have an insurance coverage of two or three times the amount of construction project budgets.
Commercial ContractorsUsually commercial contractors are expected to have multi-million insurance coverage’s, allowing covering any related injury or damage due to the construction. Normally, commercial contractors with higher risk of damages, for example, roofing contractor, or contractors who perform on high specialized trades are the ones with the biggest insurance coverage. Indemnity corporations charge policy holders a modest down payment and monthly fees to finance premiums over six months to a year.
Limits on Liability Insurance
Construction liability insurance has also its limitation. You must set limits per each occurrence and limits for aggregated values.Limitations are also set for fire damage to property under construction as well asmedical expenses for injured workers on the jobsite that might not be covered under workers ’ compensation. Covered damages also include liability for personal and advertising injury; that is litigation produced from claims that the contractor's promotional advertising in someway caused the homeowner or other interested party to incur a financial or personal loss. No matter how large or small the job, in the building trades, having adequate insurance against liability is always the best policy.
