(833) 650-6844
Managing a commercial construction or renovation project involves numerous responsibilities, from meeting deadlines to coordinating materials and schedules. Builder’s Risk Insurance, also known as Course of Construction (COC) Insurance, plays a crucial role in safeguarding the effort and investment poured into these projects.
During construction or renovation, projects face numerous risks, from fire and theft to accidental damages and vandalism. Builder’s Risk Insurance provides a safety net, covering unexpected damages and ensuring the project can proceed smoothly despite unforeseen setbacks. According to industry experts at the National Association of Insurance Commissioners, this type of insurance is pivotal for mitigating financial risks associated with construction projects (NAIC, 2024).
Builder’s Risk Insurance, synonymous with Course of Construction Insurance, is designed to protect buildings under construction. It covers the structure, materials, and equipment against various perils such as fire, theft, and vandalism, as well as additional costs like architectural fees if delays occur. This insurance is often essential for property owners, contractors, and lenders. The Insurance Information Institute provides a detailed breakdown of the coverage specifics (III, 2024).
This insurance type is vital for covering damages to the property being constructed or renovated, safeguarding contractors and builders against significant financial losses and liability claims. Lenders frequently require this insurance to ensure their investments are protected throughout the construction phase.
Unlike typical property insurance, Builder’s Risk Insurance covers the project from groundbreaking to completion. It is indispensable for contractors and property owners, protecting against unforeseen damages and covering additional expenses that arise from delays, which are not uncommon in the construction industry.
The cost of Builder’s Risk Insurance averages around $134 per month. To determine the necessary coverage extent, consider the project’s duration and specific risks. Coverage usually concludes once the project is completed, based on specific conditions outlined in the policy. This pricing insight is corroborated by data from a recent report by Construction Coverage (Construction Coverage, 2024).
In general, a course of construction policy helps you with any physical items involved in the building of a construction project such as materials, supplies, equipment in transport, half-built gazebos, and onsite equipment. This can include power tools, cement, tiles, aggregate and more. Damage from the following events will be covered by most policies.
You should read your course of builder’s risk insurance policy to be familiar with its limitations and exclusions. Limited coverage is provided for collapse.
A standard COC policy does not include coverage for:
While there might be instances of exclusions to the insurance policy, some items have limited coverage under a COC policy, so it’s wise to ask your agent about any additional offerings that might help fill the gaps left by a limited coverage form.
It’s important to recognize what is not covered under a standard COC policy, such as damages from earthquakes, floods, or faulty design. Some risks might only have limited coverage, so discussing additional coverage options with your insurance agent can be beneficial.
While either homeowners or contractors can purchase this insurance, contractors often find it more practical to include it in their project bids. This ensures all financial aspects of the construction—including labor, profits, and materials—are covered under the policy.
While COC Insurance covers physical assets related to the construction work, General Liability Insurance addresses property damage and bodily injuries that third parties may suffer. For example, if a homeowner injures themselves on the construction site, General Liability would cover their medical expenses and any legal claims.
Builder’s Risk Insurance is an essential component of any construction project, offering comprehensive protection against a wide range of risks and facilitating smooth project completion. For more detailed information or to secure a policy tailored to your project’s needs, consider reaching out to the California Pool Association or a similar organization in your region.