What Does Builders Risk Insurance Cover?

Builders risk insurance can help financially protect buildings and structures while they are under construction. Understanding builders risk insurance can be crucial for contractors in Fair Oaks, California, to safeguard their projects and investments.

Coverage Overview

Builders risk insurance primarily covers property damage to buildings and structures under construction. This includes damage from various risks such as fire, lightning, hail, explosions, theft, vandalism and certain weather events. Additionally, it can financially protect materials, supplies and equipment on-site, in transit or stored at other locations.

Extended Coverage

Builders risk insurance can assist with various soft costs incurred from construction delays due to property damage. These soft costs might encompass lost sales, rental income, extra interest on loans and real estate taxes. Contractors have the flexibility to tailor their policies with coverage extensions to meet the unique requirements of their projects. Common extensions include protection for scaffolding, construction forms, temporary structures, debris removal and pollutant cleanup.

Exclusions

Contractors must be aware of standard exclusions in builders risk insurance policies. Coverage typically does not extend to damage from earthquakes, floods, wind or beach zones unless specific extensions are added. Other exclusions may include the following:

• Wear and tear
• Acts of terrorism and war
• Employee theft
• Rust and corrosion
• Mechanical breakdowns
• Damage due to faulty design, planning, work and materials.

Essential Coverage for Construction Stakeholders

Any party with a financial interest in the construction project should consider builders risk insurance. This includes property owners, general contractors, subcontractors, lenders and architects. A properly structured builders risk insurance policy is essential for protecting the financial interests of all stakeholders involved in the construction process.

Learn More

For builders risk insurance near you, contact Valentina Gaiduchik Insurance Agency.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.