Course Of Construction

Course of Construction defined

Course of construction (COC) refers to the insurance that a builder will purchase to cover the dwelling that he is constructing. It is done as insurance to value and should reflect the completed value of the building. In this value should be extras built in such as by-law changes, contractor's profit, debris removal and other items as reflect the true replacement value.

How does it work?

This type of insurance must be purchased before the framing starts from basement. A contractor can own a piece of land and it should be listed under his liability policy. It is once the building gets started that there is a limitation to the time that insurance must be placed to be given a reasonable cost.

Is there limitations?

it is possible to have a blanket policy that will cover all buildings that are constructed by that particular insured during the policy year. This form requires that the start date and finishing dates are reported to the insurer and a premium adjustment is done at the end of the year for overage or shortage of estimated building costs.

Once the building is completed it is considered vacant and needs to be listed on a commercial general liability policy under property. Vacant properties have some rather severe insurance limitations and you need to discuss this with your agent or broker. If the building is now purchased and occupied then it can be insured with that particular type of coverage - an example is a home that has people living in the basement - it is no longer vacant.

The insurance answer

Course of construction coverage has certain limitations as to starting the coverage. If you are going to build then do check with your agent or broker about your building plans and requirements. If you left it too late then the consequences could be much higher rates for the necessary coverage.