Builders Risk

Builders Risk is coverage you buy to pay for damage or loss to a building that is under construction. You normally will state how much coverage you want while the building is being constructed. Once the building is completed this coverage no longer applies.

Usually the coverage will include fire and extended coverage, a stated value of items in transit to the construction site, items stored at the site, vandalism and malicious mischief. It is usual to estimate what the finished value will be and pay for coverage for that amount right from the beginning.

It is very important that you notify your agent or broker as you near completion date so that you can put the correct form of insurance on the building. If you had a loss and the building was found to be complete then you would be on your own, without insurance protection.

Insurance underwriters will consider a building completed when there is a certain percentage done or if the building is now occupied. Be sure that you take control of your insurance and know when this point is achieved so that you can amend your policy to give you the necessary resources in case of a claim. Be aware that a "vacant" property has some severe restrictions for insurance coverage, particularly for water claim. Talk to your agent or broker.