Builder's Risk Insurance: How It Works, Benefits, and Cost
No matter how attentive you are, accidents happen. And when they do, it's important to have insurance that can help protect your business from financial losses. That's where builder's risk insurance comes in.
This type of commercial property insurance helps protect your business from potential losses related to construction projects. Whether you're a contractor or supplier, it's important to understand how a builder's risk insurance works and its cost and benefits.
What It Covers
Builders’ risk insurance policies cover property damage or loss during construction.
These losses can include things like:
- Materials that are ruined or stolen from the job site
- Weather damage, like wind and hail
- Equipment that is damaged or stolen
- Loss of income if the project is delayed due to a covered loss
Builder's risk insurance can be purchased as a standalone policy or as an endorsement of a business owner's policy (BOP). Working with your insurance agent to determine the best coverage for your business is important.
The Cost of Builder's Risk Insurance
The cost of builder's risk insurance will vary depending on several factors, including:
- Value of the property being insured
- Location of the project
- Type of construction being done and more
Most policies are written on a per-project basis, so you'll need to provide your insurance agent with an estimate of the project's overall cost. The premium is usually a percentage of that entire cost and is paid in installments throughout the project's life.
Benefits of Builder's Risk Insurance
There are many benefits of builder's risk insurance, including:
1. Protection from Financial Loss
If your construction project is damaged or delayed due to a covered loss, builder's risk insurance can cover the cost of repairs or lost income. This coverage can help you avoid financial ruin in case of an accident.
2. Peace of Mind
Construction projects are a risky business. With builder's risk insurance in place, you can rest assured knowing that your business is protected in case of an accident. This type of insurance can offer you the peace of mind you need to focus on your work and grow your business.
3. Attracts Customers
In today's competitive marketplace, many customers are looking for businesses that carry builder's risk insurance. By having this kind of insurance, you can attract more customers and grow your business.
4. Eases Concerns of Lenders
The lender may require you to own insurance if you borrow money to finance your construction project. This type of insurance can help ease lenders' concerns and make getting the financing you need easier.
5. Protects Your Employees
If your construction project is damaged or delayed, your employees may be out of work. Builders’ risk insurance can help cover their lost wages, protecting them from financial hardship.
With such benefits, it's no wonder builders' risk insurance is so popular among businesses in the construction industry.
A Must-Have for Construction Businesses
Builder's risk insurance is a must-have for any construction business. It can help protect you from financial losses due to accidents, weather damage, and more.
If you're not already insured, make sure to talk to our team of experts at Hoffman Hanono Insurance about a policy that's right for you. We have the experience and knowledge to help you find the best coverage for your business. Give us a call today!