A home renovation can completely transform a property, while a new commercial building has the potential to be a lucrative endeavor. While the two projects may seem vastly different, they both require a period of construction, which can include risks. Luckily, builders risk insurance protects the interests of both contractors and property owners. Here is what you need to know about the coverage style.

A Guide to Builders Risk Insurance

What Is It?

The policy is designed to offer financial protections during the construction of residential or commercial properties. First, it covers damage to the structure itself. The protection also extends to the supplies—including equipment—designated for the project, even if they aren't housed on site. In some situations, non-tangible losses are also included in the policy, such as money lost as a result of construction delays.

What Scenarios Are Covered?

Every builders risk insurance plan is different, so the specifics are determined by the policy you choose. Most standard options protect against severe weather, such as a tornado, a lightning strike, and a fire. Human-based acts, like theft and vandalism, are also commonly covered. As with home insurance, flood damage is usually excluded and requires an endorsement or separate policy for coverage.

Why Is It Important?

Regardless of the precautions taken, the risks associated with construction are virtually endless. Unfortunately, most property and business insurance policies don't extend to the building or renovation phase of a project. To avoid significant out-of-pocket costs, builders and property owners need to make sure they're covered until the project is complete.
 

If a construction project is in your future, keep your finances protected with the help of Dunlap Agency, Inc. Since 1986, the insurance agency has provided quality assistance to residents and businesses across Fairbanks, AK. From home and auto to small business and builders risk, the team works with each client to find the ideal policy match. Browse their coverage options online and request an insurance quote by calling (907) 456-5202.