A builders risk policy is insurance that provides coverage for buildings currently under construction, including a new structure, or a remodeling job where repairs are being made for a client. This policy, available as part of your new jersey contractors insurance, includes any materials related to the job prior to installation, as well as materials intended to be used. Coverage is provided for materials that are still in transit along with the actual property being built, repaired or remodeled until it’s completion.
Builders risk insurance can be purchased for specific home improvement projects as well. For example, you can purchase coverage if you’re remodeling a kitchen, putting in a new deck, or adding a room. This policy provides considerable value, especially in conditions where building materials and equipment may be at risk.
Who needs a builders risk policy?
Contractors, subcontractors, homebuilders, home renovators, real estate developers, building owners, colleges and universities, and municipalities generally purchase a builders risk policy as added protection. A builders risk policy includes perils such as theft, vandalism, fire, windstorm, lightning, and hail. Most policies also offer limited coverage in the event that the structure collapses during construction.
Standard exclusions include earthquake, flood, and any weather damage to property in the open, water damage, employee theft, mechanical breakdown, war, government action, contract penalty, and voluntary parting. There may also be exclusions for damage resulting from faulty design, planning, workmanship, and materials. Builders risk insurance offers coverage for accidental events, not for issues concerning poor construction. Earthquake and flood coverage can usually be added to the insurance policy at an additional cost.
The named insured a builders risk policy is usually the contractor or developer of the property. However, it may be the building owner or homeowner if they are taking on the responsibility for insuring the property while under construction, particularly in cases where the construction is a remodel or repair of an old structure. A mortgagee or lien holder may be added as an additional insured. Speak to an agent regarding any questions about your new jersey contractors insurance needs.