Contractors and builders are usually working with costs that can fluctuate dramatically and aren't always certain.
You strive to complete your work on time and under budget, however, no one can prevent unexpected construction mishaps or disasters. When these things happen, they can lead to increased anxiety stress as you wonder how you're going to pay what could be hundreds of thousands of dollars to rebuild your project.
So, what's one way you can protect yourself from financial problems occurring on your construction projects? You can obtain builders risk insurance!
What's Builders Risk Coverage?
Builders risk insurance is coverage that protects buildings under construction or renovation. Should an incident, such as fire or windstorm, ruin the process and lead to damage, this policy might help you recoup costs. Costs including your overhead and even your profit.
By taking a look at an example, you can see why this coverage is so critical. Let's say you're the contractor on a new retail center. Your budget stretches in to the millions of dollars when you factor in labor, materials and more. If an unexpected disaster springs up, this could lead to financial ruin. This is a situation where builders risk insurance would come in handy and pay for the labor and materials to rebuild.
How Can Builders Risk Insurance Pay?
You might have to pay for quite a few services to clean up damage after a problem at your construction site. Your builders risk insurance might provide coverage for the following expenses:
- Debris and Pollutant Removal to help clean up damaged items and make the area safe.
- Property Replacement to help you obtain new materials. Your coverage might pay in-full or partially for the cost of the items that were stolen or damaged by a covered cause of loss. Policies might also contain Escalation Protection to cover increases in the cost of materials or labor.
- Soft Costs to pay for architectural, permit, insurance or loan costs, that may have to be paid again due to having to rebuild.
- Change Orders that are common in construction projects.
Each builders risk policy will differ. Be sure to ask your Southwest Commercial Insurance agent to tailor your coverage to your needs. Your agent can likely combine your coverage with other policies to help you get the most effective protection.