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What Does A Builders Risk Insurance Policy Cover?

If you are building a new home or have a project that is being remodeled by a general contractor your property is at risk and you should make sure you have some kind of risk insurance coverage in the event of an accident. Any person in the construction industry knows that events and circumstances can damage building materials that are left on site for job construction. The same builders will seek to insure the materials from damage and loss by purchasing a builders risk insurance policy. A builders risk insurance policy is a highly specific insurance policy built for a specific need. Not every person will need this type of coverage, but there are people who do.

Builders risk insurance is a type of property insurances that will reimburse lost expenses from damaged materials and buildings are being constructed. Items like drywall, stone, fixtures, tools and equipment, and anything else that is being used in the construction process is likely to be insurable. This kind of insurance is not for homes that are already built but for homes that are being built and are under construction.

The builders risk insurance policy usually covers for losses caused by fire, wind, lightening, theft, and other perils. Acts such as earthquakes, flood, war, and other like perils usually are not covered. The insurances definitions page will have a complete list of covered and not covered perils. When the building is completed this type of insurance ceases to be in force and a home or business policy must take over coverage’s.

The builder’s risk insurance policy should save you money in the event that something happens to your property that you would never wish on your next door neighbor. Even if your whole house is in shambles, you do not want to be forced to pay another large lump sum of money to cover the rebuilding process. You should ask your builder or home remodeler contractor if they have coverage already because if they already have coverage you do not need to carry it yourself.

The people most likely to take out this kind of insurance policy are building contractors and remodelers. These type of building construction contractors have an interest to protect the material they have purchased for the construction job. A home owner has no vested interest in the construction materials but only in the completed structure. That is why the home owner would purchase a home owner’s policy once the construction job is complete.

Gemma-Leigh Garner has been a direct response copywriter who has been writing for the contractor insurance industry for years. She helps educate light commercial general contractors, homebuilders, remodelers and trade contractors on the importance of having a builders risk insurance policy to cover construction related risks.