When you have a current construction project, builders risk liability insurance covers damages that may occur on-site. It protects your property from financial losses due to incidents like fire, vandalism, weather events and theft.
Who Should Purchase a Builders Risk Policy?
If builders risk insurance safeguards a building project, which party involved needs to buy the policy? Property owners are typically responsible for costs associated with damages from events like hail, theft or fire. Due to this financial accountability, the owner should purchase the builders risk plan. However, sometimes, the general contractor buys the coverage and includes the property owner as an insured.
Who Should You Include On a Builders Risk Liability Insurance Policy?
This insurance type covers a wide range of events, so you must ensure you include people with an investment in the project. Consider including the following parties on your plan:
- The general contractor oversees the construction and faces a significant risk for loss if damages occur to the structure.
- The subcontractors work on the project and may have involvement in accidents that incur costs.
- The lender is at risk of a financial loss if something occurs that delays or damages the building during construction. You typically add them under a mortgagee provision.
- The developer or property owner has a substantial interest in the building. If the general contractor purchases the plan, they should include the owner as an insured.
Ensuring your new building has adequate protection from potential issues with builders risk liability insurance is vital to prevent considerable losses when unexpected events occur.