Builders Risk Insurance: A Smart Investment
Most people outside the construction industry have probably never heard of the financial product called
builders risk insurance. This insurance's intent is to safeguard one's monetary interest in the raw material during the whole duration of a construction project, whether building a new structure or remodeling an existing edifice. The coverage includes product at the construction site, in transport, or already used and incorporated into the project. The builder, remodeling contractor, homeowner or whoever is performing the work and at a financial risk can buy this insurance. In the case of a remodeling project, the homeowner is especially at risk, as most homeowner policies don't provide coverage on the property while it is under improvement.
Builders risk insurance coverage is different from the homeowners' policy or contractors' general liability policy. It is also unique in that there is no "one size fits all" policy; these products can differ from job to job according to need. To accommodate the "construction season", a policy can be purchased for a shorter time period. The coverage can differ on topics including equipment mishap, robbery, or even profit protection for the contractor. The industry standard for suitable coverage includes the finished re-sell value of the property and the realistic profit of the builder.
The benefits of a builders risk insurance policy are very clear. For the contractor, his construction materials are covered in case of a fire, theft, or any detrimental act. In our current era of never-ending lawsuits, this translates into peace of mind for the small-business owner. Now, the homeowner has protection when his property is most vulnerable while under construction. More terms can be purchased to cover most contingencies such as additional loan interest expense or loss of income from delayed openings.