What perils are covered by Builder's Risk Insurance?
Buildings and structures under construction or renovation are particularly vulnerable to losses. The reason is primarily because uncompleted or unoccupied buildings are very inviting to intruders, arsons and thieves
but also because open, uncompleted buildings are more vulnerable to forces of nature such as wind damage than enclosed completed structures.
Builder's Risk Insurance can cover a multitude of perils that can
result in damage or loss to property under construction. The most common of these are damage or loss from fire, high winds, lightning, hail, theft and vandalism. Less common perils that are usually covered by
Builder's Risk Insurance are explosions (a risk in buildings serviced by natural gas) and damage from vehicles or even aircraft.
The builder's risk insurance policy can also pay your expenses to remove
debris from covered property if the debris results from a loss that is covered under the policy.
What perils are not covered by Builder's Risk Insurance?
Flood damage or wind damage in beach zones are not usually covered unless specifically included in the policy. (Water damage from the backup of sewers and drains is usually covered). A rider for flood damage should
be considered for any Builder's Risk Insurance policies issued in the New Orleans area or just about anywhere in Louisiana!
Accidents and injuries at the workplace are not covered by Builder's Risk
Insurance. Workers Compensation Insurance should be in place to cover all workers at the job site!
Other perils and situations not covered by Builder's Risk Insurance are: weather damage to property
or materials left in the open, war, government action, contract penalty, voluntary parting, mechanical breakdown and damage resulting from faulty design, planning, workmanship or materials.
earthquakes are also not typically covered in Builder's Risk Insurance but are not usually a concern in the New Orleans area or in Louisiana.
How much Builder's Risk Insurance is needed?
Builder's Risk Insurance policy will pay for damages to property, materials, fixtures and equipment included in the policy up to the covered limits. The covered limits for a building or structure must accurately
reflect the total completed value of the structure including all materials and labor costs, but not including land value. The construction budget is the best source for determining the appropriate limit of insurance
How long is a Builder's Risk Insurance Policy in affect?
Builder's Risk insurance policies are usually written for three month, six month or twelve month periods. If the project is not completed by the end of the initial policy term, it can usually be extended, but
usually only one time. Coverage should begin prior to when the first materials are delivered to the job site and typically ends at the closing of the sale, occupancy or the policy expiration date.
coverage under the builder's risk insurance ends, the property owner should have permanent property insurance in effect such as a homeowner's policy or a commercial property policy.
Be Sure Your Construction Project is Properly Covered!
Are you a property owner or contractor preparing to begin a new construction or renovation project in Metairie, Covington or somewhere in the New Orleans area? If so, contact a Commercial Insurance
Specialist at Alliance Insurance Agency for a free consultation regarding your Builder's Risk Insurance coverage.
At Alliance Insurance Agency, we can provide coverage for construction projects of any type or size!
On the Northshore, contact our Covington office at: (985-273-3150)
On the Southshore, contact our Metairie office at: (504-831-2196)
We have Commercial Insurance Specialists at both our Metairie and Covington offices who are experts at helping you properly insure your
upcoming construction project!