construction workers

What is Builder's Risk Insurance?

Builder's risk insurance is a specific type of property insurance that covers property owners and builders for damages that occur to buildings while under construction. It also covers materials, equipment, tools and fixtures used during the construction or renovation process.

A builder's risk policy is in effect for up to one year. If a project is delayed the policy may be extended but is only in effect during the course of construction.<

Who Needs Builder's Risk Insurance?

  • Residential and commercial construction contractors should have builder's risk insurance before beginning any project, regardless of its scope.
  • Homeowners who wish to hire building or trade contractors to renovate, alter or add to their existing property should request a copy of the contractor's insurance certificate before work begins.
  • If you are a land owner who is building on your own property and acting as general contractor, you can purchase a builder's risk policy.
  • If the project is financed, the lender may require the builder or homeowner to produce proof of insurance before disbursing funds.

What Does the Policy Cover?

Builder's risk insurance covers property damage to the building under construction, construction materials, equipment, temporary structures, fencing, landscaping and other property used on the job. Damages caused by severe storms or human error may also be covered.

What's Not Covered?

  • Theft is not automatically covered, but can be added if the property qualifies.
  • Coverage is optional for labor costs, expenses and lost income.
  • Natural disasters like floods, earthquakes and windstorms are not usually covered under a construction policy, but separate insurance may be available.
  • Accidents and injuries on the job fall under worker's compensation insurance, which is obtained separately.
Builder's risk insurance coverage may vary depending upon the scope of the project or state and local regulations. Your independent insurance agent can discuss your specific needs and help you understand the options.

Are you covered? Call Buschbach Insurance Agency at (708) 423-2350 for more information on Oak Lawn construction insurance.
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