Construction involves expensive equipment and structures, and those valuable assets need to be protected on the job site. One way that Massachusetts contractors may protect their equipment and in-progress structures is by purchasing builders' risk insurance.
Builders risk insurance is specialized commercial insurance for construction businesses. Policies can protect a range of assets that are kept on job sites.
Any Massachusetts business that has equipment, supplies or partially completed work at job sites should consider builders' risk coverage. This includes general contractors, subcontractors and lenders. Property owners may also purchase coverage in certain situations.
Lenders and property owners normally purchase the coverage to protect their financial stake in a partially completed project. Lenders also frequently require contractors to carry the coverage when financing projects.
Smaller contractors that don’t finance their projects often should have builders' risk policies even though they usually aren’t required to. Almost everyone in the industry has equipment and supplies at job sites that would be expensive to replace.
Builders' risk can protect most assets kept at job sites. Contractors might insure their
When in-progress construction is insured, builders' risk might help pay both labor costs and material costs associated with redoing work that’s damaged.
Builders' risk coverage can protect assets on many different job sites. New residential developments, new commercial construction, major additions, major remodels, extensive hardscaping and extensive landscaping job sites all can typically qualify for coverage.
Finding coverage for one house or residential remodels is more difficult, but policies might still be available. An insurance agent who specializes in builders' risk can check whether there are coverage options for smaller jobs.
Builders' risk policies can cover many perils that might impact a job site. The exact perils covered by a policy are determined by that policy’s terms and conditions, and there are a couple of different ways terms can define what’s covered.
Named perils policies normally state explicitly what perils they cover. Basic form policies are named perils policies that have limited protections, usually extending to basic risks such as fire, lightning and wind (plus a few others). Broad form policies have more extensive lists, usually including non-flood water damage, falling objects (and others).
Open perils policies normally state explicitly what perils they don’t cover, usually covering any risks that aren’t noted in the exclusions. Exclusions often include risks such as earthquakes, war and other risks. Many open perils policies are called special form policies.
Builders' risk can be purchased on its own as a single-coverage policy. It’s more commonly purchased along with other coverage through a commercial package policy. Commercial package policies can combine many different coverages depending on a business's needs, and most businesses in the construction industry have multiple needs.
Business owners' policies generally don’t include builders' risk, as they’re designed to protect against basic risks that businesses across industries have.
For help insuring equipment, supplies and in-progress construction, contact the independent insurance agents at Roger Keith & Sons Insurance. Our Massachusetts agents are well-versed in the risks that construction businesses face, including damage to and loss of on-site assets. We’ll help make sure your equipment is well protected with builders' risk insurance, for the duration of your construction projects.