Understanding Builder’s Risk Insurance
A builder’s risk insurance policy usually has some type of limit. If damage occurs that exceeds this limit, it will be not be the responsibility of the insurance provider to cover the associated expenses. Because of this, it is of the utmost importance for a policyholder to purchase a plan that adequately covers the total value of a building as well as any materials being used.
Most builder’s risk policies can be written in any of the following terms:
- Three months
- Six months
- 12 months
Understanding What is Covered
Most builder’s risk policies provide coverage for a wide range of events that could result in damage, including:
- Voluntary parting
- Water damage
- Government action
- Contract penalty
- Mechanical breakdown
- Employee theft
As said before, a one-time extension may be provided if a construction project is not finished by the time an builder’s risk insurance policy ends. Sometimes, there are others reasons in which an extension can be obtained. One such reason often includes when a part of the project is damaged while in transit to the construction site. Another reason that an extension may be granted is when the fire department is called upon to protect or save a property from a loss that is covered within the policy.