2021 Commercial Interior Design Trends

by | Sep 16, 2021 | Blog

If you are planning a construction project, we hope you have considered doing what you can to minimize any risks involved. Whether your project is a new-build or a remodel, you may not know about the insurance that protects owners and property managers during construction.  Moreover, if you aren’t experienced with insurance as it relates to commercial construction projects, you may have even assumed that the general contractor you hire has all the coverage that is needed to protect you from any losses.  Well, in some cases that may be true, but in many cases it is common for owners and property managers to take out what is called “course of construction” or “builders risk” insurance to protect themselves against loss during their project.

What is Course of Construction Insurance?

Course of construction insurance is property insurance that can provide temporary coverage against damage or loss during new construction or a remodeling project. The insurance may only cover the structure, or it can be expanded to include building materials. Policies are typically written in three, six, or twelve month terms.  The insurance carrier may allow an extension if the project isn’t completed by the end of the term. Check with local, county, and state agencies to see if they require a certificate of insurance before construction begins. Choose a construction insurance broker experienced writing builders risk, and when selecting a policy, carefully review and understand what the policy covers, the policy limits as well as its limitations and exclusions.

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Why Get Course of Construction Insurance?

Considering the values typically associated with these projects, it only makes sense to protect your investment with course of construction insurance.

What type of damage does it cover?  This varies, but common coverage includes damage from:

  • Fire
  • Wind
  • Theft
  • Lightning
  • Hail
  • Explosion
  • Vandalism

Some soft costs it may cover include:

  • Lost sales
  • Rental income
  • Additional interest on loans
  • Real estate taxes

How Much Does Builder’s Risk Insurance Cost?

The costs depend on your unique needs. You may need to add extensions to help protect your construction project. Here are some of the main factors that affect the overall cost:
  • Price of construction materials
  • Type of project
  • Coverage amounts and limits
You may want to consider selecting coverage limits that are equal to the anticipated cost of construction. In the end, the best way to find out your builder’s risk insurance cost is to contact your insurance agent or broker.
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Last Words

Here are some last words of advice regarding course of construction insurance.  The insurance should be active before work begins, and even before you move materials and tools onto the site. Make sure you understand what triggers the start of your coverage– the policy may start on the date when all the contracts get signed, but certain policies may restrict when coverage begins. Since it’s a temporary insurance policy, your builder’s risk coverage will likely end after project completion, but there’s a chance it doesn’t end until the policy expires/is cancelled, or it may end when the building becomes occupied or is put to its intended use.

If you are ready to get started on your commercial construction project, reach out to us today via email at info@emeraldinc.biz or call us at 480-832-9808.