Builders Risk Insurance: A Hard Hat for Developers
Builders risk insurance is a special form of insurance written to cover the unique loss exposure presented by buildings under construction. The policy provides fire and property hazard coverage often beyond that which can be found under the common commercial property forms. Builders risk insurance cannot provide other coverage (liability, workers compensation, flood, etc.) needed for those who are erecting buildings. Separate coverage must be written to provide the full spectrum of insurance protection that a builder needs during construction.
When buying builders risk insurance, the insured must purchase coverage in an amount equal to the final and full replacement value of the structure. Note that most carriers will not issue a policy after construction has started, which is why it is imperative that coverage be secured before your project breaks ground.