Builder’s risk insurance is an opportunity for construction companies to protect the projects they undertake. This type of coverage is not always provided in a standard business insurance plan, however, it can be an important add-on for businesses that are in the business of building and/or remodeling.
Builder’s risk insurance provides protection from instances when a construction project is affected by fire, weather, theft, etc. How does this policy impact your company and why do your customers care if you maintain this coverage?
What Is Builder’s Risk?
A builder’s risk policy provides property coverage for projects under construction. Like most business insurance policies, builder’s risk coverage helps a company minimize the losses associated with taking on a construction project. Builder’s risk policies often cover an organization’s interest in materials and fixtures either on the job or in transit to the job. It generally applies to new buildings but can also provide coverage for materials on remodels just as well. If those structures sustain any type of loss or damage from a covered cause, this policy pays out at the lost value.
Why Builder’s Risk Insurance Matters
Builder’s risk insurance provides a safety net from financial loss and avoids having to pay for the required materials twice in case of a covered loss.
But why do your customers care about whether or not you have this financial protection in place?
The primary reason is because it shows your commitment to taking the necessary steps to reduce the risk of having your customer (or you, if your contract requires you to provide the materials) have to come out of pocket to pay for materials that were stolen or destroyed. By providing this type of security, customers know you’re taking the responsible step to insure a project that can overcome a complete loss. This gives them confidence and makes them feel less risk-averse. For that reason alone, companies should consider investing in builder’s risk insurance.
Builder’s risk is a key component of any business insurance for the construction industry. It is nearly always a requirement from most lenders and on any government bid. Due to the value it brings, it should always be a part of any residential or commercial development project. With it, companies show that they are responsible and dedicated to protecting their project and financial interests. Most importantly, customers know that if there is a complication, this policy will offer them the financial protection they need.
Guardian Insurance can help you get covered. Call us at 855-554-6482 for a free builder’s risk insurance quote.