Building Your Dream Home, Business, or Commercial Building? Make Sure You Have a Builder’s Risk Policy in Place.

Written by on 6/16/2015 10:00 AM . It has 2 Comments.

You’ve made the decision to go for it. You’re finally going to build your North Carolina home, new business, or commercial building!  You know exactly what type of wood floors you want, the color of the marble for your bathroom, the exact brick you’ll use on the outside. The plans are finished, and you’re ready to go.

You’ve read through the contract between you and the builder multiple times. Your contractor has all of the necessary insurance policies in place, but do you have the insurance that you need? If you don’t have a Builder’s Risk insurance policy, the answer is “no.”

WHAT IS A BUILDER’S RISK POLICY?

Sometimes called a “course of construction policy,” a Builder’s Risk policy protects your home or business while it’s being built. Yes, your contractor has liability insurance to cover you in case of neglect on their part, but any other damage that occurs will be your responsibility. This policy pays for damages up to your coverage limit.

You can purchase coverage both the structure and the materials. You can choose a 3, 6, or 12 month policy. There are also options for time extensions though, in some cases, only one extension of the coverage may be allowed.

Your coverage limit is determined by the total completed value of your home, including materials and labor costs, and does not include the value of the land.

WHAT’S COVERED IN THE POLICY AND WHAT ISN’T?

When considering a Builder’s Risk policy, it’s important to understand what is covered, and what is not.

THINGS THAT ARE COVERED:

  • Fire
  • Wind (this may be limited in hurricane-prone areas)
  • Theft
  • Lightning
  • Hail
  • Explosion
  • Vandalism
  • Vehicles

THINGS THAT ARE NOT COVERED:

  • Earthquakes
  • Employee theft
  • Water damage
  • Weather damage to property left out in the open
  • Acts of War
  • Government action
  • Contract penalty
  • Damage from faulty design, faulty planning, faulty workmanship, or faulty materials.

Some of what isn’t covered by the Builder’s Risk policy may be covered by your builder’s insurance or other insurance policies that you currently have in place. We’ll work closely with you to determine exactly what risks you have and to make sure that you have all of the necessary insurance policies in place.

You’ve waited a lifetime to see your dream home come to life. Don’t lose everything simply because you didn’t purchase a Builder’s Risk policy. And don’t depend on your contractor’s insurance policy to cover everything that could go wrong on the job site. This is more than a house, this will be your home for many years to come. Make sure that it’s protected from the start.

If you’re thinking of starting construction or if you’ve already got blueprints in hand, give our team a call and let’s get started on a free quote. We’re happy to answer any questions that you may have.

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