Your business is high risk and ever-changing. With each new job you get new clients, a different location, and a variety of new environmental factors.
Yes, it’s an exciting and challenging industry, but outside forces which are out of your control can make running a construction business stressful.
Never knowing what’s around the corner on any given project, builders risk protection gives you peace of mind knowing your business assets are protected on the job site.
Read on to learn three benefits of having builders risk insurance.
1. Your Tools Are Protected
Your commercial insurance policy typically has your tools, equipment, and other materials covered while they are at your place of business. However, they may no longer be protected in a situation where they are at a much greater risk of being lost, stolen, or damaged: on a job site.
With builders risk coverage, you won’t be stuck paying the bill to replace your tools, equipment, or materials should losses occur on the job site due to:
Your crew quits for the day, leaving all the materials in place to pick up where they left off in the morning. Unless you have the resources to put up surveillance cameras or hire a security guard, all of your assets could be left unprotected.
While the cost for smaller tools that go missing can add up, heavy equipment losses can be particularly expensive. In one case, vandalism to unattended heavy equipment on a job site added up to $150,000.00. That’s a lot of zeros.
Consider what it would do to your business if you had to spend your hard-earned money just to replace the tools, equipment, or materials you’ve already worked so hard to acquire. Would your business continue to thrive, or even survive?
From blueprints and scaffolding to hammers and bobcats, builders risk insurance generally covers all losses you could experience on a job site.
2. Your New Build is Protected
You’ve been working on a new residential build for coming up on three months, investing a lot of resources and making some serious headway. Then one day, a wildfire ravages the neighborhood, taking all of the materials at the job site along with the structure your crew has built.
What would the cost be to replace your materials and supplies, clean up the damage, and start over on your build? It would likely be astronomical.
Builders risk coverage will help pay for the replacement of your materials as well as the rebuilding of the damaged structure. And it doesn’t just cover fires.
A builders risk policy can be structured to include protections for damage due to:
Property Damage
Damage to construction materials including fencing, scaffolding, and more.
Theft
Stolen building materials, such as copper wiring or lumber.
Natural Disasters
Hailstorms, windstorms, and rainstorms can cause damage to structures and building materials.
Man-Made Disasters
Such as accidental explosions or intentional vandalism.
Soft Costs
Architect/ engineer fees, interest, and insurance costs.
Shielding your business from the high costs of perils such as theft, damage, and vandalism, builders risk help to protect your bottom line.
3. Your Remodel Project is Protected
It may come as a surprise but your client’s homeowners insurance doesn’t protect the project you’re doing on their property.
Doing an addition to an existing structure? That addition isn’t considered part of the home yet. Until the project is completed it can only be protected under a builders risk policy.
The same damages that are covered for a new build (listed above) apply to an addition or remodel on an existing structure.
How Does Builders Risk Work?
Should your tools, equipment, materials, or structure suffer theft, vandalism, or damages builders risk will help with the costs so your business doesn’t have to foot the bill.
Helping to replace lost tools and heavy equipment, builders risk will also help cover costs after structural damage to a build, including:
- Demolition of damaged existing structure
- Debris removal and other cleanup costs
- Replacing building materials
Builders risk coverage lasts for the duration of the given project that the policy is taken out for, ending with the completion of work.
While builders risk insurance is quite comprehensive, there are some limits to what it will cover.
What Builders Risk Doesn’t Cover
A builders risk policy is generally written as an “all-risk” policy, which means it covers just about every risk you can think of. But it doesn’t cover absolutely everything. Here are a few things this broad policy typically doesn’t include coverage for:
Small repairs
Builders risk insurance is intended for major construction or remodels to residential and commercial structures, not smaller repairs.
Specifically excluded incidents
Incidents outlined as excluded from your policy will be outside your business’ insurance coverage.
Intentional acts or fraud
If damage or loss occurs due to dishonesty or through intentional behavior than a builders risk policy will not cover it.
Builders risk is not required by law but it may be necessary to assure your peace of mind.
Know that your tools, equipment, and materials are protected when you’re up against a tight deadline and that you won’t be stuck covering the high costs should disaster strike.
