At Beyond Insurance, our mission is to build lasting partnerships with our clients. We understand that your business is complex, and protecting it requires a tailored approach. As your trusted insurance and risk management partner, we step in to provide gap-free protection, ensuring that every aspect of your construction project is covered.
Construction insurance is divided into two key categories:
- Property Insurance (First-Party Coverage)
- Liability Insurance (Third-Party Coverage)
Both of these coverages are project-specific, ensuring your unique needs are met from the ground up.
Property Insurance: Builder’s Risk Coverage
Property insurance for construction projects, whether it’s a new build or significant renovation, is typically covered under a Builder’s Risk policy, also known as Course of Construction insurance. This policy protects against physical loss or damage to materials, fixtures, and appliances intended to become part of the finished structure.
Here’s what a Builder’s Risk policy can cover:
- Temporary structures
- Equipment in transit
- Equipment breakdown during testing or commissioning
- Business interruption (available for commercial projects)
Builder’s Risk policies are generally written on an “All Risks” basis, meaning they cover loss from events such as fire, theft, vandalism, and severe weather. Optional coverage for flood and earthquake can also be added for enhanced protection.
Key Considerations for Builder’s Risk Policies
- When to Purchase: Ideally, the policy should be in place before construction on the foundation begins. However, some policies are available for projects that have already started.
- Who Should Arrange the Coverage: Typically, the general contractor arranges the Builder’s Risk coverage. However, depending on the contract, either the property owner or contractor can take on this responsibility. It’s crucial that the general contractor and property owner are both listed as Named Insureds on the policy.
- Renovation Projects: For renovations, the Builder’s Risk policy can cover either just the renovation itself or both the renovation and the existing structure, depending on your needs.
Liability Insurance: Protecting Against Third-Party Claims
Alongside property insurance, liability coverage is essential for protecting against third-party claims. Liability insurance ensures that if someone is injured or property is damaged due to negligence during the construction project, you’re covered.
There are two primary approaches to construction liability coverage:
1. Course of Construction Liability
Some Builder’s Risk policies can include premises liability coverage for the property owner. This covers any third-party bodily injury or property damage caused by subcontractors or other involved parties, though each party typically needs their own coverage in place.
2. Wrap-Up Liability Insurance
A Wrap-Up policy provides coverage for all stakeholders in the construction project—general contractors, subcontractors, architects, and engineers. This comprehensive approach eliminates the need to confirm individual policies and ensures consistent coverage across all parties.
Wrap-Up policies can also include a completed operations extension, available for 12, 24, or 36 months. This extension is critical because claims may arise after the project is completed. Coverage under the Wrap-Up policy would only be applicable if the claim occurs during the policy period, making this extension vital for ongoing protection.
Why Choose Beyond Insurance for Construction Insurance?
At Beyond Insurance, we are experts in assessing and addressing complex insurance needs across industries, including construction. We pride ourselves on offering strategic, holistic solutions that ensure our clients are prepared for any eventuality. With an in-depth assessment of your operations, we tailor a comprehensive protection plan designed specifically for your business.
Our clients trust us to ask the right questions, understand their unique needs, and provide solutions that address risks they may not have even considered. We don’t just send a renewal notice every year—we are your dedicated partners in insurance and risk management, ensuring that your assets are fully covered at all times.
If you’re looking for more information about Builder’s Risk insurance or want to explore your construction insurance options, get in touch with myself or my team at Beyond Insurance.
