As Miami construction lawyers, we understand that risk is a part of all construction projects. While we don’t create a plan with the expectation of failure, construction sites hold many variables that have to be accounted for. Otherwise, failure is likely to happen and in a most impactful way. Among many methods for minimizing risk, builder’s risk insurance is one of the most prominent.
What is Builder’s Risk Insurance?
Builder’s risk insurance covers the structure as it sits on a piece of property. It can include the structure itself as well as materials, whether they are sitting on a jobsite or being delivered to the jobsite. The coverage is primarily purchased by the contractor. It’s not uncommon for project owners to require contractors to carry this coverage prior to the start of a project. Ideally, a builder’s risk insurance policy should start prior to the delivery of materials and end once the project is complete.
What Does Builder’s Risk Insurance Cover?
Builder’s risk insurance protects the structure in the event of:
What Does Builder’s Risk Insurance Cost?
Each insurer is different, but typically builder’s insurance costs from 1-4 percent of the total cost of a construction project.
What Builder’s Risk Insurance Does Not Cover
Builder’s risk insurance does not cover the following items:
- Voluntary parting
- Employee theft
- General liability
- Contract penalty
- Water damage
- Mechanical breakdown
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.