Contractor Builders’ Risk checklist – are your interests protected?

Why do you need builders’ risk insurance for your New Hampshire or Vermont construction project?

Builders’ risk insurance provides coverage for your next construction project. Whether you’re adding to your Vermont farmhouse or building a new home in New Hampshire, you can get builders’ risk insurance. This insurance is also known as “course of completion” insurance. Builders’ risk coverage is available to anyone with insurable interest in a new construction or renovation project.

Homeowners and business property owners in Vermont and New Hampshire should be aware of builders’ risk coverage. They should talk to their insurance agent to check for builder’s insurance before the project. It’s advisable to make sure they have the proper builders’ risk coverage in place.

Builders’ risk insurance in Vermont and New Hampshire lasts only for the project’s duration. This makes it different from homeowners, commercial property, or general liability insurance. Builders risk coverage is a combination of insurance types with broader coverage. Insurance companies design these policies with highly customizable language to suit the nature of your project.

Who should get Builders’ Risk Insurance?

A builders risk insurance policy protects the homeowner or business property owner from loss during the construction or building phase. After it is complete, the builders’ risk policy goes away, and the homeowners’ or business property policy takes over. If you’re renovating or adding to your home or business property in Vermont or New Hampshire, talk to your insurance agent. Discuss the project details to ensure your homeowners’ policy covers these changes.

If you’re a building contractor in New Hampshire or Vermont, we recommend having commercial builders’ risk insurance. If possible, make sure the business or homeowners’ in New Hampshire and Vermont picks up where yours ends. You may want to name multiple parties on your commercial builders’ risk insurance policies in some instances.

Transparency about blanket builders’ risk insurance coverage creates a layer of protection, and It helps maintain a smooth transition from construction to ownership. Unexpected loss during this time may feel unlikely, but they can occur. Storms, theft, and even fire can cause damage and loss on any construction site.

Take the necessary steps to make sure coverage is in place through the entire lifecycle of the project. Most importantly, don’t forget about protection during the time of transition.

What does builders’ risk insurance protect?

Besides homeowners’ and business owners, investment firms and lenders obtain builders’ risk insurance to shelter their financial investment in the completed structure. Typically, their risk begins when they take ownership of a completed project.

A general contractor buys blanket builders’ risk insurance to protect their materials and equipment during the building process. Their risk begins when the project materials are purchased and ends when ownership of the structure is transferred.

Each of these groups might not understand (or care about) the unique risks of the other party.

Vermont and New Hampshire Builders Risk Checklist

Use this checklist to determine your risk exposures. We’ll help you close the gaps with specialized insurance built for your business.

• Check your risk liability exposures
• Does your builders’ risk policy begin before building materials are delivered to the project site?
• Does your contract with the municipality, city, or lender require you to secure insurance? If so, are your limits high enough? Is your coverage broad enough?
• Do your projects involve green or Leadership in Energy and Environmental Design-certified (LEED) properties? If so, do you have green upgrade coverage for replacement materials?
• Does your policy cover the actual cash value (value less depreciation)? Does it cover replacement value (value using current prices) of materials?
• Do you have tailored coverage limits to reflect potential soft costs if a project is delayed? Soft costs can include additional wages, lost income, lease extensions, expedited expenses, advertising, blueprints, overhead, consultation fees and inspections.
• Do you have coverage for temporary fixtures such as cribbing, fencing, signage, and scaffolding?
• Are you a project investor or owner? If so, you’ll need additional insurance to extend coverage beyond the completion of construction.
• Have you determined the time element coverage? The time element names a period of indemnity and restoration. This is useful if a catastrophic loss occurs during construction or the ramp-up period. Time element coverage typically includes the time it will take to recover and rebuild after a loss. It provides for the contractor’s lost business income and may also account for the lost income of the owner.
• Is there a “permission to occupy” endorsement in your policy? This permission to occupy for builders’ risk coverage can be an issue. It’s a problem if you’re working on a project where people inhabit parts of the structure before construction is complete.
• Do you have environmental protection and pollutant cleanup insurance in case of an accidental chemical release?
• Do you have completed but vacant structures that need to be insured until they’re sold?
• Do you employ workers?
• Do you use subcontractors such as plumbers and electricians?
• Are you and your subcontractors’ named insureds on the owner’s insurance policy?
• Are the owner and subcontractors listed as named insureds on your insurance policy?
• Is there a waiver of subrogation provision for the insurance policies covering your projects?
• Do you have coverage for equipment breakdown or damage, which can result in costly delays?
• Do you have coverage for subcontractors’equipment and materials if they’re damaged or stolen from your job site?
• Does your insurance protect your profits if you experience a loss during construction? Does it cover the total value of an unsold dwelling?
• Do you have ordinance or law coverage? It’s important if your structure suffers a partial loss and the building code requires you to rebuild the undamaged parts.
• Do you have coverage for debris removal after a covered loss?
• Do you have coverage for the testing of building systems?
• Do you have flood insurance (including mudslides)?
• Do you have earthquake or earth movement coverage?
• Do you have business income protection?
• Do you transport machinery, materials, or equipment between job sites? Ask about a blanket policy.
• If you’re involved in a renovation project, does your insurance cover the existing structure and the improvements?
• Does your policy cover valuable papers and records?
• Are your equipment, machinery, and materials covered for sewer backup, drain, and sump overflows?
• Issues Not Covered by Standard Builders Risk Insurance

A builders’ risk policy will cover your Vermont new construction or New Hampshire renovation project through completion. But you should also know how to insure your project after completion. These policies are not typically included in blanket builders’ risk insurance in Vermont or New Hampshire. However, they can help you limit your business risk exposure.

Talk to an agent about builders’ risk insurance for New Hampshire and Vermont homeowners’, business owners’ and builders.

Ask us about construction risk packages. An insurance bundle could offer broader coverage or lower premiums for year-round coverage. Get insured before you begin your next construction project — we’re here to help you seal the gaps. Give us a call today!

Give us a call

Ask us about construction risk packages. An insurance bundle could offer broader coverage or lower premiums for year-round coverage. Get insured before you begin your next construction project — we’re here to help you seal the gaps. Give us a call at 800-392-6532.