Builder's Risk Insurance

Builder's Risk Insurance


Do you ever see a construction site and wonder just what would happen if a massive gust of wind knocked everything down? Or if one of those gigantic industrial machines accidentally clipped something important and everything came crashing down in a giant waterfall of rubble and concrete? Obviously we hope that never happens, but those are real dangers in the construction industry. That is why builder’s risk insurance is such a crucial aspect of any project. What is builder’s risk insurance, I hear you ask? Allow me to explain.


In short, builder’s risk insurance is a specific type of property insurance that offers indemnity against damage to buildings under construction. Everyone in the construction industry will tell you that the most difficult aspect of any construction project is getting shovels in the ground. Once construction begins, things become pretty straight-forward. However, one of the reasons that the entire process leading up to getting construction started is stressful is because of the uncertainty that can be encountered.


These projects more-often-than-not cost millions of dollars to even get started. If you’re going to put that much wealth into something, you need to make sure every small detail is covered before any commitment is made. This is why builder’s risk insurance is so important. It usually only costs 1%-5% of the entire construction cost and offers protection against things going wrong in a major way.


Under this type of insurance, perils such as fire, wind, theft, and vandalism are covered amongst many others. What if, though, the construction takes place somewhere notorious for earthquakes? The cool thing about this is that, because construction can be incredibly circumstance-specific, the insurance available for it follows suite. In fact, purchasing extra earthquake coverage when appropriate can be one of the most economical decisions that can be made in the entire project. Ultimately, these insurance policies can be tailored to the smallest relevant details.


In general, there are two types of coverages to choose from – property & liability. Perhaps the most popular choice is comprehensive general liability; and this is because of how much protection it provides. With comprehensive general liability, there is legal liability for compensatory damages because of bodily injury or property damages to third parties arising from all your operations. After all, the most important aspect of any construction project and site are the builders themselves! Without them, nothing would get done. Obtaining this type of insurance is a good way to show a vested interest in your work force because of the protection it provides them.


Whilst there is no shortage of types of property insurance, typical property insurance policies are not designed nor priced to cover the inherent risks that come with these kinds of projects. Furthermore, the ability to name additional insured’s under an umbrella policy is crucial for bigger projects that have several working parts – why purchase multiple individual policies when one does the trick?


The reality of it all is that the world is greatly expanding. Populations are growing, and, in turn, construction is booming. Putting aside the economic benefits of builder’s risk insurance still leaves you with the humanitarian benefits – it is protection not only for your work site, but also for the people that operate in it.


Don’t just protect your materials, fixtures, and equipment; protect your people. Contact one of our licensed brokers today at 905-696-9770 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it. to learn more.

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