Builder’s Risk/Cost of Construction Insurance
Whether your plans are to build a new, spacious, custom home, or to remodel your current home, or to do a room addition, a commercial building, or multi-family units, there is a vast array of planning that goes into these types of projects from architectural designs, permits being pulled, to finding an experienced, appropriately insured General Contractor and qualified sub-contractors to make sure the project is done correctly. Another important part of your planning when starting out on these projects is to acquire a California Builder’s Risk Insurance Policy, which is also known as Cost of Construction Insurance.
CA Builder’s Risk Insurance/Cost of Construction insurance is a specific type of OC property/inland marine insurance coverage which guards against damage to structures while they are under construction. When you acquire a California Builder’s Risk Insurance Policy, you are protecting an individual’s or a company’s insurable interest in the structure, equipment and/or fixtures, and the materials that may be used in the course of a new custom home construction, remodeling of an existing structure or a commercial building in the event that they suffer damage or a physical loss from one of the covered causes of loss contained in the Builder’s Risk Policy. If your plans involve building a new home or renovating your current home, there is a very high chance that your current homeowner’s policy will not cover any losses should an accident occur while you are remodeling your home or building a new one. This is why it is imperative that you purchase this specific type of insurance coverage before the project starts.
After you suffer a theft, fire damage, or some other peril that will cost several thousand dollars, that is not the time you want to find out there is no coverage for these events and the cost for the damages will come out of your pocket. A great rule to follow is that before you start your residential or commercial project, make absolutely certain that either the contractor or the property owner purchases a CA Builder’s Risk Insurance Policy as well as carrying general liability insurance coverage so the project will be covered so there won’t be any surprises if something should happen. Please also be aware that a California Builder’s Risk Insurance Policy will have a maximum payout of the coverage limit which is stated in the policy.
When you are planning your project, several of the items you will want to consider when determining what the value of the builder’s risk policy needs to be are overhead, labor and material costs, but not the cost of the land. One thing to consider is what dollar amount would it take to start the project over from scratch. Builder’s Risk Policies can be written on a three month, six month, or twelve month cycle. If the project is going to take longer than 12 months, you can purchase a longer term policy, and, in most cases, it can be extended once if need be.
PJO Insurance Brokerage works with several Builder’s Risk markets and has the expertise to guide you through the process, making sure you understand what is covered and what is excluded on your California Builder’s Risk Insurance Policy. We can also help you secure any additional specialized coverages your project may need. Our brokers would welcome the opportunity to work with you on your next new home, commercial building, or renovation project. To request a quote, please call the professionals at PJO Insurance Brokerage.