Construction related property damage keeps public adjusters very busy. Companies and individuals with a financial stake in a construction project will want to be covered by a Builder’s Risk policy (also known as Course of Construction insurance). This kind of coverage is so crucial that the majority of banks and lenders that invest in construction projects make coverage a requirement for financing. There are two main kinds of policies you’ll want to look into: specified perils and all-risk.
A specified perils policy protect against a particular risk. If you’re doing construction in an area that isn’t known for safety, a policy that covers theft and vandalism may be good to look into. If you’ll be building in an area that can have unpredictable and strong weather, your policy could be designed to cover hail, windstorms, and even earthquakes. These policies tend to be more affordable because insurers have a small exposure to risk. The main drawback to these policies is that it will only cover events and problems you specify. If you have a policy that protects against fire and your construction site is robbed, you won’t be covered.
An all-risk policy is designed to cover all potential risks of damage or loss in a construction project. Even though an all-risk policy will protect you against most damage, it can’t cover all kinds. Doing construction with damaged and faulty materials could negate your coverage, and problems that are caused by blatant negligence could also result in your claim being denied. It’s also important to note that a builder’s risk policy is not a replacement for liability insurance, and will not be able to provide coverage for any workers that are injured or killed on the job.