Builder’s Risk

Builder’s Risk policies are one of the most misunderstood and most incorrectly issued policies there is.  The common misbelief (by investors and agents alike) is that a builder’s risk policy should be purchased any time any type of repair or remodel is going to take place.  This is simply not true.  Many make-ready projects and minor rehabs don’t require builder’s risk coverage at all and, depending upon the situation, using a builder’s risk policy can actually put the property owner at greater risk for loss or liability issues.  In addition, Builder’s Risk coverage may be purchased from several companies, both standard and non-standard, and the coverages can very greatly depeneding upon your needs and insurance budget.

Builder’s Risk policies are a very specialized type of insurance policy that can have a great deal of variation regarding coverage and terms and they should only be used in specific situations requiring this type of coverage.  As mentioned, coverages and endorsements vary from company to company, but a general list of policy features is below (again, these may vary from one company to another):

• Builder’s Risk Policies Normally Do Not Include Liability Coverage (though Liability Coverage May Be Avilable With Some Non-Standard Companies),

• Builder’s Risk Policies Usually Auto-Expire Either 90 Days After The Project’s Completion or 60 Days After the Property is Occupied or ‘Put to Intended Use’ (whichever comes first),

• Builder’s Risk Policies DO NOT insure for Replacement Cost (Loss Settlements are ACTUAL CASH VALUE <ACV> ONLY),

• All Builder’s Risk Policies are 100% ‘Earned Premium’ (this means that all premiums are due in full when the policy is issued and there are no refunds if a policy is cancelled prior to its expiration date,

• Builder’s Risk Policies May Be Issued In an Individual or Company Name,

• Policy Terms May Be Anywhere From One (1) to Twelve (12) Months,

• ‘One-Shot‘ Policies are available for One-Time Projects,

• ‘Reporting Form’ policies are available for situations where multiple projects are started and ended throughout the year (such as subdivisions, custom builders, etc) and the insured needs to be able to add and remove properties as-needed.

We at InsuranceForInvestors are experts in the area of Builder’s Risk coverage, and because we have a variety of policies and coverages available from numerous companies, we have the ability is provide coverage for any project type, from minor residential remodeling jobs to multi-million dollar commercial projects and new construction.  Due to our established relationships in the builder’s risk market, both standard and non-standard, we can provide the exact mix of coverages, endorsements, and policy lengths that you need.

If you would like to discuss your Builder’s Risk needs, call us at (512) 501-4010 or (800) 299-8994 to see how we can help you find exactly what it is that you are looking for.  You may also email us at Info@InsuranceForInvestors.com and we will contact you back to discuss your situation and tailor a solutions specific to your needs.