When starting a construction project, whether it's a residential home or commercial building, numerous factors come into play to ensure its successful completion. One critical aspect that is often overlooked or underestimated is the importance of Builders Risk Insurance. This type of coverage provides essential protection for your project against unforeseen events that could potentially derail your construction efforts and impact your financial investment. In this blog post, I'll explain the details of Builders Risk Insurance, explaining what it is, why it matters, and how it can protect your construction project.

Builder's Risk Insurance is a specialized type of property insurance designed to cover the physical assets involved in a construction project. This can include the structure itself, materials, equipment, and machinery. The coverage can extend to both new constructions and renovations or remodels.

Builders Risk Insurance is essential for the following parties:

• Property Owners: Protect your investment from unforeseen events that could derail your project and lead to financial loss.
• Contractors: Protect your materials, equipment, and labor investment against unexpected incidents that may stall your work and result in delays.

• Lenders: Lenders often require builders risk insurance as a condition for approving construction loans, ensuring that their financial interests are protected. They will most likely want to see a declaration page with coverage limits and expiration dates. 

When to Get Builders Risk Insurance: It's very important to secure builders risk insurance before construction begins. If you call to get a policy after the project starts, you might run into some problems. The coverage typically starts when the project's foundation is laid and ends when the project is completed and ready for occupancy. It's important to note that the policy should cover the full estimated value of the completed project, including labor, materials, and other expenses. 

Review your Policy: When selecting a builders risk insurance policy, consider the following factors:

• Coverage Limits: Ensure the policy covers the estimated value of your project.
• Perils Covered: Review the list of perils covered by the policy to ensure it aligns with the risks specific to your project's location and nature.
• Deductibles: Evaluate the deductible amount and choose a level that aligns with your risk tolerance.
• Exclusions: Understand any exclusions or limitations in the policy to avoid surprises in case of a claim.

Builders Risk Insurance is essential for protecting your construction project from unexpected setbacks and potential losses. By understanding its importance and choosing the right policy, you can ensure that your project remains on track, even in the face of unforeseen challenges. If you have any questions about Builders Risk Insurance or any other Business Insurance policies, please feel free to contact me. 

Jason Matison
Commercial Insurance Agent
Austin, Texas