Builder’s risk insurance covers destruction or damage to a construction project. Today, most construction projects are funded by a loan that uses the building and materials as collateral. To protect the building during construction from risks such as fires, explosions, and flooding most lenders require the owner or the builder to carry a builders risk insurance policy.
How much is Builders Risk Insurance?
The cost of builders’ risk insurance is between 1% – 4% of the total completed value of the project. The total premium includes the cost of all the labor and materials installed on the project.
Who needs builders risk insurance?
Anyone with a financial interest in the construction project. These include the lender, project owner, general contractors, subcontractors, and architects.
What does builders risk insurance cover?
Builders risk insurance protects buildings and structures under construction. Builders risk insurance policies cover losses to:
- Equipment on site
In the event that the loss causes a delay, builders risk insurance policy also covers losses to:
- Additional interest on loans
- Real estate taxes
- Lost sales revenue
- Lost rental income
Where can I buy a builders risk policy?
You can request a quote from a licensed insurance agent here. Billy is a licensed insurance agency in all 50 states, click to get a quote.