What property is being insured
The review starts with the building under construction, materials and other property the policy agrees to cover. The completed value means the expected value of the finished project, including the labor and materials used to build it. It is different from the value of materials sitting on site today.
Identify the owner, contractor and lender, and use the contract to determine who arranges insurance. Their interests may need to be included in the policy. Buying coverage twice or assuming someone else bought it can both create problems.
A renovation needs a clear boundary
Separate the value of the existing building from the value of the new work. Some forms cover only the renovation work, while others can include existing property under specified terms. Coordinate this with the owner’s property insurer before construction begins.
Materials away from the site
Cabinets in a warehouse and fixtures traveling to the project may need coverage for off-site storage or transit. A sublimit is a smaller maximum inside the overall policy limit, such as a separate cap on stored materials.
Provide the maximum value at each location and during a shipment. Contractor-owned tools and machines usually need a separate tools and equipment review; they are not automatically part of the building being insured.
Causes of loss, deductibles and project timing
A peril is a cause of loss, such as fire or theft. Policies can treat water damage, wind, flood and earthquake differently. An exclusion removes coverage for a stated cause or situation. A deductible is the part of a covered loss you pay.
Coverage can end because of completion, occupancy or another trigger stated in the policy, even when a printed expiration date is later. Tell us about delays, early move-ins and partial occupancy before they occur so the insurer can address the change.
Prepare the project details
Send the address, work description, construction type, budget, start and expected completion dates, and any lender requirements. For an existing structure, include its value, age, condition and whether people will remain in it.
We can then explain the proposed property limits, deductibles, storage coverage and completion terms. Injury claims and damage to unrelated property need a separate liability review alongside the builders risk policy.
Common questions
Builders risk is primarily property coverage for the project. General liability addresses covered third-party injury claims, while workers’ compensation addresses covered employee injuries. A construction project may need all of these for different reasons.