Builders Risk insurance, also called Course of Construction insurance, is needed when constructing or reconstructing a structure such as a building or home. This discussion will address reconstructing a Home.
A traditional Property Insurance policy such as Homeowners insurance or will not cover you for items such as vandalism and malicious mischief when the property is not occupied for a certain amount of time. Generally, the vacancy period is 60 days. Additionally, most Homeowners Insurance companies will cancel your policy if they find out it is under construction. Lastly, if there is financing, the bank will require the Insurance.
It is often best to secure the course of construction policy alongside your homeowners policy because you will want to have the liability coverage provided by the homeowners insurance as there are many other variables that need to be considered such as theft of construction materials from the site, vandalism and malicious mischief to the structure, and liability concerns such as injuries to children or other curious individuals who may make their way onto your property or project.
While Course of Construction policies are not inexpensive, it is because there are many losses associated with such projects ranging from small losses like theft of materials, to very large losses like injuries to children playing on the site while nobody is supervising them. The premium for Course of Construction policies is based on the value of the project or addition that is added onto the existing structure. You’ll be able to provide these limits to our office once your project has been dead and your contractor has been selected.
When trying to determine the limit of insurance for your project, please contact our office for guidance. Please reach out to us today with any additional questions about course of construction and poor builders risk insurance. We look forward to speaking with you.
