Builders' risk insurance is a policy that will help pay to repair, replace or recover the current value of a construction project. This includes a number of different claim types such as fires, theft, labor costs and natural disasters.
As a builder or building owner, having the proper builders' risk policy in place could save your project and you thousands of dollars in expenses.
Finding the right local independent insurance agent that is experienced in the different types of builders' risk policies is key to a project staying on track.
Why Do I Need a Business Owners Policy?
If there is damage to your property or the property of others, employee theft, mechanical difficulties, or an everyday accident at your business that causes a loss of income, a BOP can keep you from having to close your doors as a result of the expenses related to the events.
Terrible things can happen if you don’t have a BOP:
Financial ruin: Why risk paying out of pocket and possibly going bankrupt, when you could just pay for a BOP that is fairly inexpensive?
Lawsuits: Legal issues can not only be costly, but they can also be very time-consuming, so one accident has the potential to bring down your business.
Losing your stuff (or other people’s stuff): Recovering the costs of theft, damage to buildings or broken equipment could send your company into a downward spiral.
Is Builders Risk Mandatory ?
The majority of the time financing is involved in a building project and most financial lenders require a builders' risk policy to be in place prior to any work being performed.
However, there is the off chance that the project is fully funded by either the builder or the building owner and no proof of builders' risk insurance is required. Having it as part of your practice is a wise decision and usually an inexpensive one at that.
What's Covered ?
What Does a Business Owners Policy Cover?
Your standard business needs a variety of liability and property insurance. Depending on your risks, you may have to purchase these policies individually or you may qualify for a BOP. BOPs provide most of this insurance coverage but under one package which makes it more affordable for businesses.
Your coverage under a BOP can include:
Property: The building and its contents.
Property of others: In case your business provides a service on property like a repair shop.
Business income: Lost income and employee salaries while you rebuild after a disaster.
General liability: For any time that you might be sued.
Employee dishonesty coverage: In case an employee steals from you.
Front store window replacement.
Hired and non-owned autos (i.e., you don’t own a company car but employees are still driving for the job).
Loss of valuable papers.