Joyner Construction Company is a fully insured general contractor, and we carry General Liability and Workers Comp coverage for our business. However, we do not carry Builders Risk Insurance for each of our projects. Why? Normally, the property owner purchases Builders Risk Insurance, and we are not usually the owners of the property. Some larger well known companies will not even allow us to purchase this type of policy unless we are the property owner, so we would have to go through the secondary market to even get quotes.
So, in general, we leave that coverage up to the discretion of the individual property owners. Also, it is not required for all projects, so it may not even be applicable, but it still is good to know it is an option you have for your project.
So, What is Builders Risk Insurance?
Simply put, it is typically coverage just for the course of construction that insures the materials, fixtures, and/or equipment to be permanently installed during the construction project. This typically applies only for physical losses or damages that are under covered causes. If chosen and added to the policy, it can also include liability protection. Here are some practical local examples.
- A construction project replacing the exterior of a home with new siding, windows, and doors is going on over the summer. However, a large storm system moves through and a massive hailstorm hits the home under construction. Half of the windows are damaged, and the materials that were on site but not installed yet are now damaged and unusable.
- A wildfire breaks out in the neighborhood. There is a home under construction that is installing an addition that doubles the size of the existing home. The current homeowners policy covers the existing home before construction. However, now that we are adding a large two-story addition that is 80% complete, depending on how the homeowners policy is written, this large and expensive addition may or may not be covered.
- A delivery of heating equipment has been delivered to the site. It was put into the locked garage to be ready to go for installation the following day, but vandals come, break open the door, and steal all the equipment. Now there is a broken door and missing equipment.
If Builders Risk insurance was in place from the start of the project, and Wildfire, Hail, and Theft are called out as covered, then this policy would cover the damages from these scenarios.
Each project is unique, and you may or may not need Builders Risk Insurance. And the policy can include many different covered causes, which can be tailored to your specific project if you decide you want it. We at Joyner Construction have purchased similar policies for some of our own projects in the past because we felt it was important to have. You can discuss with your current homeowners insurance carrier if they offer Builders Risk Insurance, or if not, who they would recommend.
As always, we would be happy to discuss which companies we have used in the past and why. We want to make sure you have a safe and insured project for the duration of construction and are always here to help.