What is Builders Risk Insurance?

Many construction projects are plagued with cost increases and delays that negatively impact contractors working on these projects. Minor project issues might be resolved with relative eases, but major problems can financially stress a contracting company or even potentially lead to bankruptcy. For contractors in Vermont, builders risk insurance offers protection against some of the negative effects that covered problems can cause.

Builders risk insurance policies are specialized commercial policies that have been designed to meet the needs of contracting companies that work on construction projects. At times, the insurance is also referred to as “course of construction insurance.”

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What Vermont Businesses Need A Builders Risk Policy?

Many contracting and construction companies in Vermont can benefit from having a builders risk policy. Whether building a brand-new structure or remodeling an existing structure, the challenges that come with construction aren’t limited to any one type of work and a policy can help protect most types of projects.

In certain situations, contracting companies that finance their construction projects may be required by the terms of their loan to carry this insurance. Lenders often include such a requirement in loans so that the lender is protected if something happens to a project while it’s in process.

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Can Contractors Get a Builders Risk Policy for a Single-Family Home?

Builders risk policies that protect new single-family homes are widely available from many different insurance companies. Policies that insure remodeling projects of already-built homes often aren’t as widely available, however.

Contracting companies that undertake major remodels and do want insurance for their work should talk with an insurance agent who specializes in builders risk policies. A specialized agent will likely be able to help contractors who have remodeling projects find coverage for their project if it is available.

What Supplies and Equipment Does a Builders Risk Policy Cover?

Exactly what a builder risk policy’s coverage extends to depends on a particular policy’s terms and conditions. Many policies provide coverage for building supplies, hand tools, power tools and larger equipment that’s kept on-site during a project, though. In some cases, peripheral supplies like portable restrooms might also be included in a policy’s coverage.

Do Builders Risk Policies Cover Labor Costs?

Most builders risk policies cover lavor that has been invested in a covered project. Should a project be stalled or canceled due to a major problem, this coverage might help a contractor make sure they can pay workers any wages that are due.

What Types of Builder Risk Policies Are There?

There are three main types of builders risk policies, and they provide varying levels of protection:

  • Basic form policies usually provide protection from limited risks, such as lightning, wind, fire and explosions
  • Broad form policies usually provide protection from more risks, often adding perils like water damage (not flooding) and falling objects
  • Special form policies usually provide protection against many risks, except for those risks that are mentioned as being excluded

Some of the risks that a special form policy might exclude include war, earthquakes and similar perils.

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How Can Businesses in Vermont Get Builders Risk Insurance?

For help insuring a construction project in Vermont, contact the insurance agents of Paige & Campbell Insurance. Our independent agents have the freedom to show you builders risk insurance policy options from many different insurance companies in the state, and we have the expertise necessary to help you decide which policy best meets your company’s needs. With our assistance and expertise, you can feel confident that your construction project is well protected.

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