Understanding Builder's Risk Insurance

Introduction

At Big Sky Builders, we pride ourselves on crafting stunning, secure, and sustainable buildings for our clients. To ensure that the construction process is as smooth and worry-free as possible, we require all our clients to secure a Builder’s Risk Insurance policy. This crucial coverage helps safeguard the project against unforeseen events and financial losses during the construction phase. In this article, we’ll delve deeper into what Builder’s Risk Insurance entails, why it’s not just an optional extra but a requirement, and how it differs from a General Liability Policy.

What is Builder’s Risk or Course of Construction Insurance and What Does it Cover?

Builder’s Risk Insurance, also known as Course of Construction Insurance, is a specialized type of property insurance designed for buildings under construction. The policy covers the policyholder against losses due to damages to the structure, and in some cases, materials at the job site.

Coverage usually begins when construction starts and ends when the project is completed and/or occupied. The policy covers damage from events like fire, wind, theft, vandalism, and other perils. Many things could happen to a structure during construction that the builder isn’t responsible for.

Who Needs Builders Risk Insurance?

Builder’s Risk Insurance is beneficial for anyone who has a financial interest in the construction project. This could include the property owner, contractor, or subcontractors. A bank will also require this coverage if there is financing on the project. The policy protects your investment from unforeseen events that can delay construction and increase costs.

Does this policy replace the Builder’s General Liability Policy?

No, it’s important to understand that the Builder’s Risk Insurance policy we require our clients to secure is not a substitute for the General Liability insurance that Big Sky Builders already carries. Instead, these two policies work independently to provide more comprehensive protection for all parties involved in the construction process.

What Information Will My Agent Need from Me?

When you’re ready to apply for Builder’s Risk Insurance, your agent will need some information.
This may include:

• Construction type
• Location
• Expected duration of the project
• Total completed value of the project
• A description of the structure

This information helps the insurance company assess the level of risk and calculate premiums accurately.

Who Should I Contact to Purchase Builder’s Risk Insurance?

We encourage you to contact your current homeowners insurance provider, as they may offer Builder’s Risk Insurance that integrates with your current coverage.

However, if they do not provide this service or if you’d like a second option, we recommend reaching out to Jones Korman Insurance in Hamilton: (406) 363-6583. They have proven expertise in this field and can help guide you through the process of securing adequate coverage for your project.

Conclusion

Builder’s Risk Insurance plays a critical role in protecting your financial interests during the construction process. With the right combination of insurance coverages, you can start your construction project with peace of mind, knowing that you are prepared for unexpected events.

At Big Sky Builders, we want our clients to be well-protected, hence the Builder’s Risk Insurance policy requirement. This proactive approach enables you to focus on what matters most—watching your vision come to life.