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Guide to Builder's Risk Insurance for Homeowners

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Guide to Builder's Risk Insurance for Homeowners

During the course of construction, California contractors are exposed to different risks. Contractors insurance coverage is your first line of defense to protect your business from financial strain due to damage and losses.

Contractors need a professional insurance agent to determine the risks and provide the right builders' risk insurance for their business. Stampede Insurance Services partners with contractors and builders to assess these risks and provide the best solutions.

What is Builder’s Risk Insurance

Builders' risk policy, also known as course of construction insurance, is a specialized type of property insurance that helps protect buildings on a construction site. Implementing a well-structured builder’s risk insurance policy is crucial for many reasons.

A builders' risk policy protects builders and contractors from losses to property and financial assets in the event of an incident. Losses may occur to the property or structure and may also include the materials on the job site. Our agency will help protect you in the event of a fire, flood, or theft.

You may also opt to have additional contractors coverage in losses due to project penalties or unexpected costs, like taxes. Builder’s risk insurance helps protect construction projects from property damage due to:

  • Fire
  • Lightning
  • Hail
  • Explosions
  • Theft
  • Vandalism
  • Acts of God, like hurricanes

A basic builder’s risk insurance policy isn't limited to the completed structure. It may also cover other elements of the construction, such as: 

  • Materials
  • Supplies
  • Equipment on-site, in transit, or at other locations

Type Of Coverage That's Right For You

Any person or company with a financial interest in a construction project needs this specialized form of insurance. Be sure to include persons involved within the company as well. The following may be added to the coverage options as well to get the best policy:

  • Property owner
  • General contractor
  • Subcontractors
  • Lender
  • Architects

Coverage

A builder’s risk insurance policy helps protect your construction projects from property damage. If the property damage causes a delay, it can also help cover soft costs or expenses not directly related to construction. This can include:

  • Lost sales
  • Rental income
  • Additional interest on loans
  • Real estate taxes

Because every construction project is unique, each builder’s risk policy is different. It would be best to customize your policy to fit your project’s needs by getting coverage extensions. Common extensions include protection for:

  • Scaffolding
  • Construction forms
  • Temporary structures
  • Debris removal and disposal in the event of a loss
  • Pollutant cleanup

Stampede Insurance Got You Covered!

Builders' risk insurance can be complex and is often misunderstood; that's why you need the expertise of skilled agents to walk you through the process.

We leverage a partnership approach to find the right coverage for your specific needs. No matter the project no matter the size, our experienced agents will help you find the best policy to fit your business.

Stampede Insurance has a partnership with 29 insurance companies to find the right policy for different businesses across various industries. When you're ready to find out more, we can help provide a free, no-obligation quote.

At Stampede Insurance Services, our consultants will help determine your needs and risks by evaluating your project. Your tailored policy may include:

  • Policy time frames
  • New construction, remodelling, and rehab
  • Coverage for framing, cleanup, debris
  • Financial costs due to delays
  • Project sites and trailers

Builder's Risk Insurance Cost

The million-dollar question. The answer isn't simple, and it all depends on your specific needs. Every builder’s risk insurance policy differs so that costs will vary depending on your needs. Your policy may need more coverage, or you may need to add extensions to help protect your construction project. These factors play the biggest role in the cost of your policy:

  • Construction materials
  • Type of project
  • Policy details, like coverage amounts and limits

A good rule of thumb is to choose coverage limits that are equal to the anticipated cost of construction. So, if your project has a high cost, it could result in a higher insurance rate.

Additional Insurance Policies For Construction Businesses

In addition to builders' risk insurance, owners of construction companies can also avail of other policies. Most businesses typically carry a combination of insurance policies for maximum protection.

Professional Liability Insurance

Professional liability insurance (PLI) is a form of liability insurance coverage necessary to help protect businesses in the service or consultant industry. A claim of negligence can be very damaging to a growing business, and if the claim results in monetary damages can be catastrophic.

Commercial Auto Insurance

Commercial auto insurance insures your vehicles for physical damage and liability coverages for amounts, situations, and usage not covered by a personal auto policy. This type of business insurance covers a variety of vehicles and is also referred to as commercial car insurance, truck insurance, or fleet insurance.

Workers’ Compensation Insurance

We know that a protected workplace is a safe and secure one. As a California employer, you have an obligation to ensure a safe workplace, and the law requires a business to have workers' compensation insurance to protect you from those unpredictable occurrences.

Finding the Right Builder’s Risk Policy

Builders' risk insurance policies can vary significantly between providers. To ensure that you receive the coverage you require, carefully read insurer quotes and partner up with a trusted insurance broker.

  • Know when your coverage starts - Your builders' risk insurance policy usually starts on the date when the contracts get signed, but certain policy provisions may restrict when the coverage begins for your project. Make sure you understand what triggers the start of coverage.
  • Know when your coverage ends - Since it’s a temporary insurance policy, your coverage will end after your project’s completion. Your policy will tell you the specific conditions of the end date of your coverage.
  • Read your entire policy - Before you sign a contract, read through your entire policy. Be sure to double-check all coverages, conditions for coverage, and exclusions. If you find a coverage gap, work with your agent or broker to address it.

Get a Quotation Today!

It can be challenging to find the right policy for your needs, especially when you have other things to focus on in your business. Stampede Insurance is here to help, and our licensed agents will help guide you through the process from start to finish.

Contact us today to learn more about your insurance needs in Pasadena, California, including Anaheim, Long Beach, Los Angeles, Riverside, and San Bernardino.  

We are also licensed in Alabama, Arizona, California (#0H18184), Florida, Kansas, Kentucky, Louisiana, Mississippi, New Mexico, Nevada, Oklahoma, and Texas.

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Located in Pasadena, California. We also serve the Anaheim, Long Beach, Los Angeles, Riverside, and San Bernardino areas.  
Licensed in Alabama, Arizona, California (#0H18184), Florida, Kansas, Kentucky, Louisiana, Mississippi, New Mexico, Nevada, Oklahoma and Texas
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