Who is builders risk insurance for?


Builders risk insurance is designed to protect buildings which are under construction. The covered property can be residential, commercial or farm buildings which business owners, contractors and subcontractors have an insurable interest in.

Characteristics of Builders Risk Insurance

Commercial building insurance does not provide coverage for unfinished structures, which are exposed to the same perils as completed buildings. To make up for this fact, insurers offer separate optional coverage that contractors or business owners, whose buildings are under construction, can add to their commercial property insurance policies.

Builders risk insurance is characterized by the following features:

  • Coverage includes the building along with its foundations, plus any fixtures that are intended to become permanent part of the building. A coverage extension for supplies and building materials belonging to others can be acquired for up to $5,000.
  • If the building has a basement, builders risk insurance coverage comes into effect when the lowest basement floor has been constructed.
  • The builders risk coverage is valid for one year or whenever the building is completed and put to use.
  • Certain property is excluded from builders risk insurance:
    • Water;
    • Land;
    • Outdoor trees, shrubs, lawns or plants;
    • Signs and posts detached from the buildings.
    • TV and radio antennas that happen to be outside the building.
  • The builders risk insurance amount is equivalent to the estimated full value of the finished building. A builders reporting form estimating the value of the building on a monthly basis, can be added to builders risk coverage.
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