Professional builders face a variety of risks every day. To protect the financial aspect of their business, a builder’s risk insurance policy is an absolute necessity. But this style of coverage is one of the least understood plans that fall under the commercial protections umbrella. Here’s what you should know about builder’s risk policies and what they entail with these four frequently asked questions.

4 FAQs About Builder’s Risk Insurance

What is builder’s risk insurance?

This style of policy is designed to cover the risks associated with construction, but each project requires its own plan. However, a builder’s risk insurance policy isn't a replacement for other commercial plans. Instead, it should be seen as a complement to a contractor's other layers of protection, such as liability and workers’ comp.

What styles of coverage are available?

A standard policy protects against the biggest threats to any structure, like fire, hail, and wind. You also have the option to boost coverage for protections against plumbing-related water damage, theft, and other common risks. However, liability issues, like injuries, aren't covered, so you need additional business owner policies.

How do I know if I need it?

Any type of commercial build needs the protection provided by a builder’s risk policy. For residential, it often depends on the level of construction that takes place. A completely new build definitely requires this style of insurance policy. However, building an addition to an occupied home doesn't always come with the level of risk that the commercial variation does.

What's the average policy length?

Builder’s risk plans are available in a variety of coverage lengths. While it varies by provider, the most common options range between three months to one year. Since a builder’s risk insurance policy is project-specific, you need to choose the one that best matches your estimated construction timeframe. Contractors that also own the property may want to purchase a longer coverage period to ensure plenty of time for the selling or leasing process.  

Keep your investments protected with the help of Integrity Insurance Solutions in San Marcos, TX. Serving the Greater Austin-Round Rock metropolitan area, the independent agency works with multiple providers to ensure their clients end up with the right insurance policy for their unique needs. From commercial to residential, the team offers unmatchable expertise and personalized assistance. Learn more about their broad range of offerings online, or request a quote today by calling (512) 396-2211.