Why a contractor should have Builders Risk Insurance
Better Protection With Builder’s Risk Insurance And Contractor’s Equipment Coverage
While a general liability policy is a must for all construction companies and contractors, it is important to have additional coverage. Builder’s risk insurance covers gaps from a general liability policy’s limitations. Since it is affordable and offers extensive coverage, construction professionals should consider builder’s risk insurance an essential coverage that they cannot afford to skip.
How Builder’s Risk Insurance Protects Contractors And Construction Companies
Every completed step of the building process adds more risk for the contractor. As buildings go up, builder’s risk or course of construction insurance helps protect structures that are in the process of being built. It provides a more comprehensive umbrella of protection than what a GL policy offers.
One of the first questions builders ask is what items the policy covers. It covers the structure itself and can also include materials on the work site as well as materials that must still be transported to the work site. This includes property in storage that will be used. Scaffolding may be covered if it is used. If the fire department must respond for any reason, the fee they charge is covered. In the event of a loss due to damage, removal of the remaining debris is covered. Sewer backups and damages to valuable papers or documents are also covered.
Another common question is what types of events that lead to damages are covered. For builder’s risk insurance, covered damages include those that happen due to fire, theft, wind, lightning, hail, vandalism, explosion and aircraft debris. Structures being built in high-crime areas, during storm seasons, in fire risk zones and in the path of air traffic especially need this valuable coverage. Any one of these incidents can cost a construction company or builder a great deal of money and lost work.
Every insurance policy has its limits. With builder’s risk insurance, earthquakes, water damage and employee theft may not be covered. There are also exclusions for government action, voluntary parting, contract penalty, war and several other standard issues. Earthquakes may be an issue in some parts of the country. While there are limitations, some coverage is provided for structures that collapse.
Builder’s risk insurance covers damages due to the covered events named previously. However, it only covers incidents and materials up to the total value of the structure upon completion.
Protect Your Construction Business
Having to absorb the costs of a major loss can put a serious financial strain on a small construction business and can quickly bankrupt an independent builder. To stay protected, Mackintire Insurance in Massachusetts recommends builders risk insurance and contractors equipment coverage for all construction businesses and builders. Contractors equipment coverage protects equipment that may be stolen or damaged by similar events. When adding contractors equipment coverage and builders risk insurance to GL coverage, the result is peace of mind and optimal overall protection. Contact Mackintire Insurance of Massachusetts for free quotes.