Construction Projects Involve Unique Risks
Construction projects involve unique risks not adequately handled by other insurance policies.
Structures under construction are much more subject to damage from the elements - wind, rain, snow,
hail etc. than completed structures. Another key issue is construction project property
values do not remain stable throughout the duration of the policy period. Instead, the insurable
value of a construction project starts out small in the beginning of the job and continually
increases until project completion. Also, property to be used in the construction may be owned by
many different parties. Maybe the general contractor, the subs, or property owner. The property
can be in transit, at the construction site, or even off-site.
To cover these unique exposures, a builder's risk policy is needed. Builders Risk policies
are specialized policies designed to cover the property loss exposures that are associated with
construction projects in Florida.
Who Is Responsible For Purchasing Builders Risk Insurance?
Who is Responsible for purchasing Builders Risk insurance, the property owner or you, the contractor?
The insurance requirement sections of the construction contract will specify whether the project owner
or the general contractor is responsible for purchasing a Builders Risk policy on behalf of all parties
to the contract.
Builders Risk is a non-standard form of coverage in Florida. This means that many companies file
their own forms - so a close inspection of the policy form is needed. But generally, each builders
risk policy as a basis of departure will cover the building that is being constructed, all fixtures,
materials, supplies, machinery and equipment that will be used in the construction.
Builders Risk Policy Coverages Can Be Vastly Different?
By way of example, this is how vastly different builders in Florida risk can be. One of our
builders risk insurance markets does not provide any general liability as part of their policy - it is
simply not available. Also, that form is written for a year normally starting the date the project
came out of the ground. But, if the project takes 2 days or 1 year - you pay the same price. It is
cash on the barrelhead for a year - and the premium is 100% fully earned. However, this company allows
for and provides as broad a builders risk policy as most Florida contractors will ever need.
By comparison another carrier will let you specify, in months, for how long you want the builders risk
policy to go. They will provide a quotation for commercial general liability as well, but
the form is not as comprehensive.
Builders Risk insurance is another area covered in insurance for Florida contractors that you simply
need an Florida Builders Risk insurance expert to provide guidance. Builders have very specific
needs, and requirements and this line of insurance shows again the vast difference between what a
generalist would know and respond to versus a contractor insurance expert and specialist.
Call us at (888) 901-7222 or
contact us for answers to your Florida Builders Risk insurance questions.
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