What’s Builders Risk Insurance and What Does it Cover?
Builders Risk insurance is a special type of property insurance which covers damage to buildings while they are under construction. It protects a person’s or organization’s insurable interest in materials, fixtures and or equipment being used in the construction or renovation of a building or structure should those items sustain physical damage or loss from a covered cause.
This type of insurance usually indemnifies against losses due to fire, vandalism, lightning, and wind. It typically DOES NOT cover against earthquake, flood, acts of war, or intentional acts of the owner. Coverage is during the construction period only, and terminates when the work has been completed and the property is ready for use or occupancy.
The general contractor may be responsible for any losses caused by his own negligence; the owner is responsible for most other losses.
Who buys builder’s risk insurance?
It is usually bought by the owner of the building but the general contractor constructing the building may buy it if it is required as a condition of the contract. Local city, county and state building codes will require proof of insurance.