Construction work is expensive and fraught with risk, protect yourself from unexpected events like fire, vandalism, weather and more with construction coverage.
What is a Course of Construction Policy?
Sometimes known as a Builders Risk policy, Course of Construction policies provide temporary coverage to protect structures and materials during the construction process. The policy provides property coverage against multiple risks such as:
- Fire Damage
- Vandalism / Malicious Acts
- Subsidence / Collapse
- Storm - Lightning / Hail Damage
- High Wind Damage
- Natural Disaster - Flood / Earthquake
Depending on your policy the cost of redoing the damaged work may or may not be included in the coverage. It is worth noting that the Burglary coverage does not protect contractors tools and the Subsidence and Collapse coverage does not cover issues caused by errors in the construction or poor workmanship.
Who needs Course of Construction coverage?
The policies protect both the property owners and the construction company / contractors and sub contractors by ensuring that if a loss occurs there are funds available to replace the damage and continue construction. The construction contract should define who is responsible for purchasing the policy. For most projects this is not an optional policy as most Local and State regulations require this policy before construction can begin. If financing is being provided then most lenders will require being named on the policy to cover the money they have lent.
How much does a Course of Construction policy cost?
The cost of a policy will depend on the project itself, the materials being used and risk of the area the construction is taking place in. However, most policies typically cost somewhere between 1% and 4% of the total cost of the construction based on the identified risk.